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Ares Management To Buy $11.6B Industrial Real Estate Manager Black Creek

Ares Management Corp. has inked a deal to acquire real estate manager Black Creek Group in an acquisition that will increase Ares' real estate assets under management to about $29B.

A planned Black Creek Group development in Dallas

Besides an unspecified amount of cash, Ares will give about 3.49 million shares of operating group units of one of its operating companies, Ares Holdings, to Black Creek at the close of the transaction, according to a filing with the Securities and Exchange Commission by Ares.

Formed in 1993, Black Creek has about $11.6B of assets under management, with its ownership structure in the form of two nontraded REITs and other institutional funds. The company characterizes its holdings as core and core-plus assets.

The deal will bulk up Ares' holdings in the industrial sector, which Black Creek has participated in almost since its founding. Among other recent ventures into the sector, Black Creek has started work on 1.7M SF of industrial space in the Inland Empire market of California, as well as 636K SF in Dallas.

“Ares believes the approximately $2 trillion industrial real estate sector exhibits consistent fundamentals across diverse market cycles and is positioned to benefit from heightened institutional interest driven in part by secular tailwinds and the accelerated growth of e-commerce,” the company said in a statement.

After a boom year in 2020, Q1 2021 was the second straight quarter of more than 100M SF of positive net absorption nationwide for the sector, Transwestern reports.

Industrial occupancy increased in 36 of 41 markets that Transwestern tracks in Q1 and in 38 markets year-over-year. Though development is also at a brisk pace, total space under construction is short of demand in many markets, the company reports, and industrial rents increased during Q1 in more than 80% of the markets.