Ares Management Corporation, a global alternative investment manager, has announced the $3.3bn (€2.96bn) final closing of Ares US Real Estate Opportunity Fund IV.
It marks the largest Ares Real Estate closed-end fundraise to date and is a significant increase from the $2.2bn of commitments raised for the predecessor fund and related transaction vehicles.
The fund attracted commitments from a diverse set of new and incumbent investors across the Americas, the Middle East, Asia and Europe representing a broad array of institutions, including sovereign wealth funds, public pensions, corporate pensions, insurance companies, endowments, family offices and private banks.
Ares said the fund will invest in opportunistic real estate in the US through equity commitments to the fund and related transaction vehicles.
The fund, in combination with capital raised for the most recent vintage of Ares’ European opportunistic real estate strategy, positions Ares with $5.5bn of aggregate opportunistic capital aimed to capitalise on attractive new investment opportunities in the US and Europe.
Consistent with its predecessors, AREOF IV focuses on acquiring real estate assets out of distressed ownership structures and special situations, enhancing and repositioning undermanaged assets, and pursuing risk-mitigated development and redevelopment in desirable submarkets.
“As capital markets stabilize, we are observing significant opportunities for AREOF IV,” said David Roth, partner and co-head of Ares US Real Estate. “We believe the mounting need for capital infusions to bridge gaps created by the deleveraging that has occurred over the past two years has yielded an attractive investible universe of high-quality real estate in desirable markets.”
Andrew Holm and Jay Glaubach, partners and co-heads of Ares US Real Estate Investments, said: “Meaningful enhancements to strengthen our origination and execution capabilities, particularly within the sectors and markets that we find most attractive, have enabled us to deploy a significant portion of the Fund in recent investments.We look forward to building on this progress while seeking to generate compelling risk-adjusted returns for our investors.”
AREOF IV’s current portfolio includes the recent acquisition and redevelopment of the Hyatt Regency Orlando for $1.07bn, marking one of the largest hotel transactions of 2024 to date. In July 2023, the fund also provided preferred equity for the conversion of 55 Broad Street in New York City’s fnancial district, one of the largest office-to-residential conversions in New York City history.
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