{"id":1004078181,"date":"2013-07-01T11:23:30","date_gmt":"2013-07-01T19:23:30","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004078181"},"modified":"2022-12-06T10:21:26","modified_gmt":"2022-12-06T18:21:26","slug":"ares-purchase-of-area-not-just-about-geography","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/ares-purchase-of-area-not-just-about-geography\/","title":{"rendered":"Ares Purchase of AREA Not Just About Geography"},"content":{"rendered":"

By Scott Baltic, Contributing Editor\u00a0<\/em><\/p>\n

\"\"<\/a>

Time Warner Center, developed by AREA Property Partners and The Related Cos.<\/p><\/div>\n

The pending purchase by Ares Management L.L.C. of AREA Property Partners L.P., announced in early May, is not just a major deal in its own right. It also reflects both an ongoing trend in institutional investment management and institutional investors\u2019 still-rising interest in commercial real estate.<\/p>\n

The transaction, the terms of which were not disclosed, will bring Ares Real Estate Group\u2019s total committed capital to $8 billion.<\/p>\n

\u201cAREA\u2019s expertise in value-add and opportunistic equity investing and mezzanine debt will complement our real estate group\u2019s current capabilities in real estate private lending,\u201d Tony Ressler, senior partner & chairman of Ares Management\u2019s executive committee, said in a release. \u201cThe entire Ares Management platform will greatly benefit from AREA\u2019s geographic reach, market insights, industry relationships and seasoned investment.\u201d<\/p>\n

Lee Neibart, AREA\u2019s CEO, will become a senior partner of the Ares Real Estate Group, with he and John Bartling, also a senior partner, as global co-heads. William Benjamin, AREA\u2019s head of Europe and India, will also become a senior partner of the group and will continue as head of Europe and India Real Estate.
\nStephen Blank, senior fellow for finance at the Urban Land Institute, noted a small but key number of similar recent M&A transactions of institutional-type managers. These include not just the 2010 mega-deal in which CBRE Group Inc. paid $940 million for ING Real Estate Investment Management\u2019s European and Asian operations and ING Clarion Real Estate Securities but also the December 2010 merger of Seattle-based Kennedy Real Estate Counsel and Vancouver-based Bentall.<\/p>\n

In view of these, Blank told Commercial Property Executive \u201cthe rules are off\u201d regarding the traditional emphasis on institutional investment managers growing organically.<\/p>\n

These days, he said, \u201cyou\u2019ve got to be very big or very sharp,\u201d either global in scope or one of the local sharpshooters. In addition, entities like CalPERS would rather deal with fewer investment managers, making the Ares-AREA deal \u201ca natural thing that\u2019s been happening in the business,\u201d Blank added.<\/p>\n

Though some mergers work out great and others not so much, Blank points out that both the Ares and AREA management teams are well regarded and that the two companies have \u201cvery complementary\u00a0skills,\u201d so the resulting entity will be \u201ca highly visible competitor.\u201d\u00a0<\/span><\/p>\n

Dan Fasulo, managing director at Real Capital Analytics Inc., drew a broad parallel between this deal and the August 2011 acquisition by Ares Management L.L.C. of the investment platform of Wrightwood Capital L.L.C., which added $1.2 billion in assets under management to Ares.<\/p>\n

In a release at that time, Bartling said that the acquisition would enhance Ares Commercial Real Estate\u2019s \u201cability to address a significant and growing need for financing solutions in middle-market commercial
\nreal estate.\u201d<\/p>\n

Fasulo noted the current confluence of \u201clarge investment managers with growing platforms\u201d with clients that suddenly want more and more real estate in their portfolios. \u201cIt\u2019s definitely a trend\u201d of investment managers wanting commercial real estate as part of their product offerings, he said.<\/p>\n

He cited the recently mega-deal in which BlackRock Inc. announced it will acquire London-based real estate manager MGPA, giving BlackRock a further $12 billion in assets under management in Asia and continental Europe.<\/p>\n

Expanding one\u2019s geographic reach (as Ares and BlackRock both did) is good, Fasulo said, but the commercial real estate aspect is more central: \u201cIt\u2019s more about buying the real estate experts.\u201d<\/p>\n

The acquisition is a good move for both Ares and AREA, Fasulo concluded. \u201cThese (M&A) deals don\u2019t happen if the market isn\u2019t moving in the right direction.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The pending purchase by Ares Management of AREA Property Partners reflects both an ongoing trend in institutional investment management and institutional investors\u2019 still-rising interest in commercial real estate. <\/p>\n","protected":false},"author":882,"featured_media":1004078182,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004078181","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nAres Purchase of AREA Not Just About Geography - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/ares-purchase-of-area-not-just-about-geography\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ares Purchase of AREA Not Just About Geography\" \/>\n<meta property=\"og:description\" content=\"The pending purchase by Ares Management of AREA Property Partners reflects both an ongoing trend in institutional investment management and institutional investors\u2019 still-rising interest in commercial real estate.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/ares-purchase-of-area-not-just-about-geography\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2013-07-01T19:23:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-06T18:21:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/07\/ARES.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/ares-purchase-of-area-not-just-about-geography\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/ares-purchase-of-area-not-just-about-geography\\\/\"},\"author\":{\"name\":\"Scott Baltic\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/61ac1450f3ffaa0e850b834c28526555\"},\"headline\":\"Ares Purchase of AREA Not Just About Geography\",\"datePublished\":\"2013-07-01T19:23:30+00:00\",\"dateModified\":\"2022-12-06T18:21:26+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/ares-purchase-of-area-not-just-about-geography\\\/\"},\"wordCount\":631,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/ares-purchase-of-area-not-just-about-geography\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2013\\\/07\\\/ARES.jpg\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/ares-purchase-of-area-not-just-about-geography\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/ares-purchase-of-area-not-just-about-geography\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/ares-purchase-of-area-not-just-about-geography\\\/\",\"name\":\"Ares Purchase of AREA Not Just About Geography - 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