Ares Closes $3.3B Opportunistic Real Estate Fund 

Ares Management Corporation held the final close of Ares U.S. Real Estate Opportunity Fund IV, L.P. (AREOF IV) at more than $3.3 billion, the largest Ares Real Estate closed end fundraise to date, according to the firm, and is a significant increase from the $2.2 billion raised for its predecessor fund and related transaction vehicles. 

AREOF IV, along with capital raised for the most recent vintage of Ares’ European opportunistic real estate strategy, gives Ares $5.5 billion of aggregate capital aimed at investments in the US and Europe. 

In line with its predecessor funds, AREOF IV acquires 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,” the firm said. 

“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,” said David Roth, partner and co-head of Ares US Real Estate. 

AREOF IV’s current portfolio includes the recent acquisition and redevelopment of the Hyatt Regency Orlando for $1.07 billion. In July 2023, AREOF IV also provided preferred equity for the conversion of 55 Broad Street in New York City’s Financial District. 

In July, the NY-based alternatives giant held the final close of Ares Senior Direct Lending Fund III at approximately $15.3 billion. The fund was oversubscribed compared with its initial target of $10 billion. The total capital base is expected to be about $33.6 billion, which includes equity commitments in related vehicles and anticipated leverage. 

Ares Management Corporation managed more than $447 billion in assets, while Ares Real Estate oversaw about $52 billion in assets as of June 30, 2024.