Ares to Buy GCP For $5.2B, Becoming Top 3 Industrial Player

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Good morning. Ares Management announced plans to acquire GLP Capital Partners for up to $5.2B. The acquisition would make Ares one of the top players globally in the industrial real estate sector.

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🎙️ Listen Now: In this episode of No Cap by CRE Daily, hosts Jack Stone and Alex Gornik sit down with Aleksandr Gampel, Co-Founder of Cuby, to explore how Cuby is revolutionizing the construction industry.

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• Damage assessment: Hurricane Milton hit Florida late last night, sweeping across the Sunshine State into Thursday morning, causing widespread damage and potentially $175B in losses.

• Real estate resurgence: US pending home sales have surged 2% YoY, led by Phoenix's 14.1% growth, influenced by a Federal Reserve rate cut, as Florida lags behind due to recent storm surges.

• Bidding wars begin: Brooklyn's Q3 residential real estate market saw highly competitive activity with a $975K median price and 4% YoY growth, driven mostly by cash deals and wealthier buyers.

• City Hall scandal: The Manhattan DA's office is investigating Mayor Eric Adams’ administration for potential bribery and money laundering, one of five ongoing probes.

• Investing impactfully: The new Turner Multifamily Impact Fund III plans to invest over $2.3B in affordable housing and has already acquired 483 units in key markets.

• B-Side Apartments: JLL (JLL) just sold B-Side Apartments, a 147-unit Minneapolis community, to Turner Impact Capital for the Turner Multifamily Impact Fund III.

• Multifamily millions: Ponderosa Park, a 120-unit multifamily property in Flagstaff, AZ, was sold to Bridge Partners for $28.05M.

• Leasing launch: A JV has started leasing Highgate at Livingston, a 169-unit luxury apartment project in Northern NJ, with rents starting at $2.45K per month.

• Mega-merger: Ares Management will potentially acquire GLP Capital Partners for $3.7B in cash and shares, with a total deal value of up to $5.2B, making it one of the largest real estate firms globally.

• Straight winning: Ares Management also just secured the biggest 2024 Miami warehouse deal for $147M, marking its third major South Florida acquisition.

• Records on the move: The Brooklyn District Attorney's Records Division leased slightly over 52 KSF at Industry City near Sunset Park for $1.2M–$1.6M per year, with a renewal option.

• Industrial boom: A savvy seller just achieved a 10x return on a 305 KSF warehouse sale in Northeast Philadelphia's industrial market, which is staying hot.

• Retail surge: Atlanta’s retail rents are standing out by growing at double the national rate due to a tight and highly competitive real estate market.

• Mall revival: 2024 has been great for malls, with a 7.3% boost in foot traffic thanks in part to a strong back-to-school season, highlighting the enduring popularity of teen retailers.

• Experiential growth: Fine arts and ‘experiential’ tenants dominated New York City's Q3 retail leasing activity as consumers continue to seek entertainment-driven experiences.

• Sophisticated social scene: September’s top retail leases in NYC included diverse businesses like a 44 KSF grocer, a 24 KSF fashion brand, and new social clubs.

• Office pause: No major office projects broke ground in Dallas-Fort Worth last quarter, a rare occurrence that may help ease rising vacancy rates.

• Vacancies soar: Meanwhile, Bay Area office vacancies have hit record levels, with San Francisco at 34.5%, Oakland at 29.1%, and Silicon Valley at 22%.

• Real estate rebound: Office vacancies in downtown Minneapolis and St. Paul remain high, reaching 23.4% and 29%, despite modest lease signings.

📈 CHART OF THE DAY