About This Fund
Ares U.S. Real Estate Opportunity Fund IV, L.P. (AREOF IV) is the fourth iteration of Ares Management's flagship U.S. opportunistic real estate strategy, targeting higher-return investments arising from distressed ownership structures, market dislocations, and capital market inefficiencies. The fund held its final close on September 16, 2024, raising over $3.3 billion in total equity commitments across the fund and related transaction vehicles—the largest closed-end real estate fundraise in Ares' history at that time and a significant step-up from the $2.2 billion raised for its predecessor. The fundraise reflects sustained institutional appetite for opportunistic real estate strategies in a market disrupted by rising interest rates, declining property valuations, and accelerating distress among overleveraged owners.
AREOF IV's investment strategy targets three primary opportunity sets: acquiring real estate assets out of distressed ownership structures and special situations (including forced-seller situations from lenders, estates, and overleveraged owners); enhancing and repositioning undermanaged or underperforming assets; and pursuing risk-mitigated development and redevelopment in high-demand, undersupplied submarkets. The fund invests across a broad range of property types including office-to-residential conversions, hospitality, multifamily, industrial, and mixed-use assets across major U.S. markets. Illustrative investments include a $1.07 billion redevelopment of the Hyatt Regency Orlando and preferred equity in the conversion of 55 Broad Street in New York—one of the largest office-to-residential conversions in the city's history.
The fund's investor base spans sovereign wealth funds, public pensions, corporate pensions, insurance companies, endowments, family offices, and private banks from the Americas, Middle East, Asia, and Europe. Ares Real Estate, a business within Ares Management Corporation, manages equity investments spanning the risk-return spectrum from core-plus to opportunistic, and benefits from the firm's broader credit platform—enabling AREOF IV to structure transactions flexibly across the capital stack, a capability unavailable to equity-only managers.