Ares Inks Deal to Buy AREA

LOS ANGELES-Ares Management LLC has agreed to acquire AREA Property Partners LP, bringing AREA's investment team and $6 billion of commercial real estate assets into its fold, the two companies said Friday. Terms of the acquisition, which will quadruple the Ares Real Estate Group's assets under management, were not disclosed.

AREA's CEO, Lee Neibart, will become co-head of the Real Estate Group along with John Bartling, senior partner in the group, while William Benjamin, AREA's head of Europe and India, will become a senior partner in the group while continuing to oversee European and Indian activity. The deal includes the minority stake in AREA held by National Australia Bank.

“AREA's expertise in value-add and opportunistic equity investing and mezzanine debt will complement our real estate group's current capabilities in real estate private lending,” Tony Ressler, senior partner and chairman of Ares Management's executive committee, says in a release. “Further, the entire Ares Management platform will greatly benefit from AREA's geographic reach, market insights, industry relationships and seasoned investment professionals—especially Lee Neibart in the US and Bill Benjamin in Europe.”

For his part, Neibart says in the release, “Combining the complementary skill sets and asset classes of both firms will yield superior sourcing opportunities and enhanced credit analysis and information flow that will enable us to bring new products to investors while offering creative debt and equity financing solutions to the marketplace. The Ares Real Estate Group will now be a significant player at a time when we are seeing increasingly compelling opportunities in existing and new mandates.”

All of AREA's existing investment vehicles will continue to be managed by legacy AREA team members in their capacities at Ares Management. William Mack, who founded the New York City-based AREA in 1993, originally as a real estate fund within Apollo Global Management, said he would step down as the firm's chairman to focus on actively managing his family's real estate initiatives, investments and philanthropic pursuits. Richard Mack, North America CEO of AREA, will become a senior advisor to the Ares Real Estate Group.

Hodes Weill & Associates acted as strategic advisor to AREA, while J.P. Morgan Securities LLC provided financial advisory services to Ares Management in connection with this transaction. Based in Los Angeles, Ares currently has a total of about $59 billion in AUM.