Ares US Real Estate Opportunity Fund III
Tropical Logistics Park, Las Vegas, NV - Closed
Development of up to 1.3MM SF of bulk distribution industrial product in an infill Las Vegas submarket
Acquisition Date:
Location:
Gross Capitalization: (¹)
Equity Committed:(2)
Capital Value:
Investment Theme:
Key Metrics
Feb-2020
Las Vegas, NV
$151 million
$35 million
$96 PSF
Industrial development in
strong MSA
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Investment Summary and Rationale
Investment in the development of up to ~1.3MM SF of bulk distribution/warehouse
space with freeway frontage along the 1-15 Freeway in Las Vegas, NV
Opportunity to develop industrial product in an infill Las Vegas industrial submarket
with limited land availability
Aim to capitalize on robust supply/demand fundamentals both in the local market
and across the southwestern region of the United States
Value Drivers
Strong Las Vegas market
The Las Vegas industrial market has seen 8%+ average rent growth over the past
five years and sits at 4.2% vacancy*
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Market occupancy is driven by business-friendly climate, no corporate income
tax, strong labor pool and proximity to the ports of Los Angeles and Long Beach
for regional distribution
Complex land assemblage
The land site constituted 18 different parcels owned by 13 separate land owners
Sponsor assembled the land over 24 months at below-market pricing,
contributed to the JV at cost
Construction risk mitigation
Ares negotiated a preferred position in the undeveloped land with the right to
force and control a land sale should we elect not to go vertical
JV agreement shifts cost overrun and guaranty risk from Ares to Sponsor
Experienced sponsor with deep Las Vegas knowledge
The Sponsor owns over 17MM SF of industrial in the Western U.S., including
3MM SF+ in Las Vegas.
Investment Status
Closed in February 2020
Executed LOI for full build to suit of one million square foot bulk distribution facility
to a major corporate user
Construction scheduled to commence in fall 2020
ARES
As of June 30, 2020 unless otherwise noted. Please refer to the endnotes on page 64. *CoStar, Q1 2020.
Confidential - Not for Publication or Distribution
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