Ares Management Corporation's ("Ares") Real Estate Group manages comprehensive public and private equity and debt strategies, with approximately $11.3 billion of assets under management ("AUM") as of December 31, 2018. With its experienced team, along with its expansive network of relationships, our Real Estate Group capitalizes on opportunities across both real estate equity and debt investing. Our Real Estate Group's equity investments focus on implementing hands-on value creation initiatives to mismanaged and capital-starved assets, as well as new development, ultimately selling stabilized assets back into the market. Our debt strategies leverage our Real Estate Group's diverse sources of capital to directly originate and manage commercial mortgage investments on properties that range from stabilized to requiring hands-on value creation. Our Real Estate Group has achieved significant scale in a short period of time through various acquisitions and successful fundraising efforts. Our Real Estate Group provides investors access to its capabilities through several vehicles: a publicly traded commercial mortgage real estate investment trust ("REIT"), Ares Commercial Real Estate Corporation (NYSE:ACRE), U.S. and European real estate private equity commingled funds and real estate equity and debt separately managed accounts. Our Real Estate Group's activities are managed by dedicated equity and debt teams in the U.S. and Europe.
Our Real Estate Group’s senior leadership averages approximately 24 years of relevant real estate investment experience. Our Real Estate Group has approximately 70 investment professionals with a global footprint across eight cities across the U.S. and Europe as of December 31, 2018. We believe our multi-asset class experience, global scale and deep property knowledge differentiate us from other investors in the real estate market.
Our Real Estate Group leverages the following core capabilities across our platform:
Our real estate equity team has extensive private equity and property experience in the United States and Europe. Our real estate equity team has approximately 50 investment professionals across six offices and primarily invests in new developments and the repositioning of assets, with a focus on control or majority-control investments. Our real estate equity team primarily targets the United States and Europe. As of December 31, 2018, our real estate equity team advised 38 investment vehicles totaling, in aggregate, approximately $7.9 billion in AUM. Primary areas of focus for our Real Estate Group equity teams include:
Real Estate Equity Value-Add Strategy: Our U.S. and European value-add strategy focuses on undermanaged and under-funded assets, seeking to create value by buying assets at attractive valuations as well as through active asset management of income-producing property types, including multifamily, retail, office, hotel and industrial properties across the United States and Western Europe.
Real Estate Equity Opportunistic Strategy: Our U.S. and European opportunistic real estate strategy capitalizes on increased investor demand for developed and stabilized assets by focusing on manufacturing core assets through development, redevelopment and fixing distressed capital structures across all major property types including multifamily, hotel, office, retail and industrial properties across the United States and Europe.
Our real estate debt team of approximately 20 professionals directly originates and invests in a wide range of self-originated financing opportunities for middle-market owners and operators of U.S. commercial real estate. As of December 31, 2018, our real estate debt team advised five investment vehicles totalling, in the aggregate, approximately $3.5 billion in AUM.
In addition to managing private funds, we make investments through a specialty finance company, ACRE, primarily focused on directly originating, managing and servicing a diversified portfolio of commercial real estate (“CRE”) debt-related investments. As of December 31, 2018, ACRE had an investment portfolio of approximately $1.7 billion in originated commitments. ACRE is managed by Ares Commercial Real Estate Management LLC, a subsidiary of Ares.
Our Real Estate Debt team focuses on directly originating loans using its extensive national relationships with various owner-operators, sponsors and intermediaries of real estate properties. We seek to provide flexible financing across a potential borrower’s capital structure. While we focus on self-originated transactions, we will also selectively pursue secondary market acquisitions and club/syndicated transactions.
The following highlights our lending strategy:
We believe our principal orientation, flexibility and non-bureaucratic approach differentiate us from other debt capital providers in the commercial real estate middle market. In addition to offering senior and subordinated debt products, we actively provide “stretch senior”, transitional senior and bridge loans in order to customize financing solutions for the specific transaction needs of our clients.
Private equity investor/direct lender
Atlanta, Chicago, Los Angeles, New York, Washington, D.C., Luxembourg, London and Paris
Multi-family, Industrial, Hospitality, Office, Residential and Retail
First Lien loans, A-notes, Subordinated Debt, B-notes, Mezzanine Debt, Preferred Equity(1), Common Equity(1), Senior Loans, Stretch Senior Loans, Transitional Senior Loans, Subordinated Debt, and Other CRE Investments
(1) None of our fund strategies involve the active trading of securities instruments; however, securities instruments may be acquired/disposed in accordance with the general strategy of the fund.