Ares Nears $650 Million Portfolio Acquisition from EQT
Ares Management is preparing to acquire a 36-property industrial portfolio across the United States from EQT Real Estate for approximately $650 million. This marks the second major logistics transaction between the two global investment firms within the past four months.
Over the last two years, Ares and EQT have emerged as the most active buyers in the U.S. industrial real estate sector, each completing acquisitions totaling more than $9 billion, according to CoStar data. Both firms have surpassed Blackstone, which ranks third with about $7.5 billion in acquisitions during the same period.
The latest deal is expected to be financed through a new commercial mortgage-backed securities (CMBS) structure currently in progress.
The transaction comes at a time when the U.S. industrial market is facing rising vacancy levels, which have been increasing for nearly three years and reached 7.6% in the first quarter. As a result, annual rent growth has slowed significantly to 1.3%, marking its lowest level since 2012.
In November, EQT sold two U.S. logistics portfolios totaling 4.2 million square feet across 33 properties as part of a strategy to enhance asset value before exiting. Ares was also the buyer of one of those portfolios, consisting of 23 properties.
These consecutive acquisitions highlight Ares’ continued expansion strategy in the U.S. industrial real estate market.
Founded in 1997, Ares Management is a global alternative investment firm with approximately 4,200 employees across more than 55 offices worldwide. Its industrial real estate division includes over 700 professionals in 44 offices globally, a presence that expanded significantly after the firm acquired Black Creek Group in 2021.
Both Ares and EQT declined to comment on the transaction.
National Portfolio:
The portfolio involved in the deal spans around 7.3 million square feet across 13 states and 18 different markets, according to Fitch Ratings.
The acquisition is expected to be financed through a $500 million floating-rate loan, likely co-originated by Wells Fargo, Barclays Capital Real Estate, and Bank of America. The deal is scheduled to close on March 30.
In addition to the loan, Ares plans to contribute approximately $168.2 million in equity to complete the purchase.
The portfolio includes 21 small- to mid-sized distribution facilities, seven large bulk distribution centers, and eight shallow-bay industrial properties. Illinois holds the largest share with seven properties totaling 1.57 million square feet, followed by Ohio with six properties totaling 1.53 million square feet.
Chicago, Cincinnati, and Atlanta represent the top three markets in terms of rentable area.
As of February 1, the properties were 95.6% leased to 38 tenants, with an average gross rent of $5.78 per square foot. Most of the assets—33 out of 36—are single-tenant properties. Major occupiers include Nike, FedEx, and Walmart, which together account for about 22% of the total leased space.
EQT Restructuring Strategy:
The sale concludes a multi-year effort by EQT to stabilize occupancy rates and increase rental income across its industrial assets, particularly in last-mile and bulk distribution properties across 11 major metro areas.
At the same time, EQT continues to reshape its portfolio. Recently, the firm acquired a nine-building industrial portfolio totaling around 2 million square feet in Southern New Jersey. The site is located within a planned industrial park less than one mile from Interstate 295, offering strong connectivity to both Philadelphia and New York markets.
This acquisition follows another major purchase completed just two weeks earlier, when EQT acquired 17 industrial properties totaling 3.2 million square feet from Mapletree Investments for $575 million.
Source: Original reporting by Mark Heschmeyer, CoStar News.
