Ares Management Acquires 14-Building South Jersey Industrial Portfolio For $118.5M

Leading investment firm Ares Management recently made a significant acquisition, purchasing a 14-building industrial portfolio in South Jersey for $118.5 million. The deal, which represents one of the region's largest industrial sales in the past year, demonstrates Ares' commitment to strategic investments in the real estate sector.

The Los Angeles-based company finalized the purchase of the properties located in Cinnaminson and Pennsauken, amounting to a total of 1,116,348 square feet. These buildings, boasting an average of 80,000 square feet of space each, were previously owned by Whitesell Construction, a reputable construction company based in Mount Laurel.

With the purchase price averaging at $106 per square foot, Ares secured a favorable deal compared to a similar transaction in Pennsauken earlier this year. In June, an affiliate of DRA Advisors acquired a 37-building industrial portfolio encompassing 1.3 million square feet for a higher price per square foot.

A Strategic Acquisition

In a bold move, the DRA Advisors affiliate has acquired the portfolio from Wharton Industrial and Walton Street Capital for a staggering $194.5 million, at $150 per square foot. This acquisition marks a significant step forward in their expansion plans.

The Ares acquisition includes prime Pennsauken properties, which have now become part of their growing portfolio. Public records reveal that 8021 Route 130 was purchased for $4.9 million, while 1050 Thomas Busch Memorial Highway was acquired for $5.8 million. These strategic acquisitions demonstrate their commitment to investing in promising locations.

Embracing the potential for growth, DRA Advisors is poised to unlock the hidden value of these properties. With a shrewd eye for lucrative opportunities, they are set to make an indelible mark in the real estate industry.

Ares Expands Portfolio with Strategic Real Estate Acquisitions

Ares continues to solidify its presence in the real estate market with strategic acquisitions. The company, currently managing a substantial $419 billion in assets, has a track record of successful partnerships and ventures. One notable collaboration took place in 2021 when Ares formed a joint venture worth nearly $400 million with Warren Avenue Investors, focused on the acquisition of life sciences real estate in Philadelphia.

Ares has also demonstrated its forward-thinking approach by investing in properties beyond the life sciences sector. In 2016, the firm partnered with Poag Shopping Centers, a Tennessee-based company, to purchase a sizable retail and office center covering an impressive 300,000 square feet in Warminster. The transaction amounted to $82 million, further bolstering Ares's diverse real estate portfolio.

Despite the recent portfolio acquisition, Ares has chosen not to disclose any specific details or comments regarding the newly acquired assets. However, their continued expansion and involvement in significant real estate ventures exemplify their commitment to growth and investment in various sectors.

A Shift in Vacancy Rates

The landscape of South Jersey's industrial space has experienced a significant shift in recent months. As of the end of December, the vacancy rate stood at 10.9%, a notable increase from the 4.4% recorded six months prior, according to CBRE, a leading brokerage firm. The expansion of South Jersey's industrial inventory from 125 million square feet to 135 million square feet within this timeframe played a key role in driving up the vacancy rates, as reported by CBRE. Despite a cooling down of industrial tenant demand since its peak in 2020 and 2021, CBRE confirms that the market remains robust and healthy.

With Whitesell Construction represented by CBRE's Michael Hines in the sale, the changing dynamics of South Jersey's industrial space present both challenges and opportunities for businesses in the region.