Ares Circles $650M EQT Industrial Portfolio in Latest Deal

Ares Management is closing in on another major industrial buy, lining up a roughly $650 million acquisition of a 36-property portfolio from EQT Real Estate.

The latest portfolio set to trade hands spans about 7.3 million square feet across 13 states and 18 markets, according to Fitch Ratings, concentrated in Illinois and Ohio. Chicago, Cincinnati and Atlanta rank as the largest markets by rentable area, CoStar reported. The deal would represent the second between the two firms in four months.

The assets — a mix of small and midsize distribution facilities, bulk warehouses and shallow-bay properties — were 95.6 percent leased as of early February. Tenants include Nike, FedEx and Walmart.

Ares is expected to finance the acquisition with a $500 million floating-rate loan from Wells Fargo, Barclays and Bank of America, packaged into a CMBS deal. The buyer will contribute roughly $168 million in equity. The transaction is slated to close by the end of March.

The transaction underscores how a small group of deep-pocketed players continues to dominate the logistics sector, even as fundamentals soften. Ares and EQT have each spent more than $9 billion on U.S. industrial assets over the past two years, outpacing Blackstone’s $7.5 billion haul over the same stretch.

The deal comes at a moment of recalibration for industrial real estate. After years of torrid growth, vacancy has climbed to 7.6 percent nationwide in the first quarter, rising steadily for nearly three years. Rent growth has slowed to 1.3 percent annually, its weakest pace since 2012, as supply catches up with demand.

Still, Ares appears undeterred. The firm has been aggressively scaling its logistics platform since acquiring Black Creek Group in 2021, and its back-to-back purchases from EQT suggest a strategy of buying stabilized portfolios with institutional tenants, even in a softer leasing environment.

For EQT, the sale continues a broader portfolio reshuffle. The firm spent years boosting occupancy and rents across its U.S. logistics holdings, then selectively exiting. At the same time, it’s redeploying capital, including a recent acquisition of a 2 million-square-foot industrial park in southern New Jersey and a $575 million purchase from Mapletree Investments earlier this month.

— Holden Walter-Warner