Ares Management, a private equity firm with $670 billion under management, announced on Wednesday that it has formed a joint venture with the Public Sector Pension Investment Board (PSP Investments), one of Canada's largest pension funds. The aim is to invest up to $2.4 billion in the development and acquisition of logistics properties in the United States.
The partnership intends to combine Ares' vertically integrated logistics platform, Marq Logistics, with PSP's substantial capital. Investment will target “high-conviction markets” and “strategically located logistics facilities,” according to a press release.
Motivation and Goals of the Partnership
Dave Fazekas, Head of Logistics for North America at Ares Real Estate, stated that his firm views investments in national logistics hubs as being motivated by resurgent onshoring trends, the growth of digital infrastructure construction, and the economy's ongoing reliance on e-commerce. He emphasised that Ares is proud to expand its long-standing relationship with PSP Investments and leverage their combined scale and experience to identify attractive deployment opportunities and create value for tenants, communities, and investors.
The joint venture already plans to invest in an initial portfolio of 14 properties totalling 5.2 million square feet. These assets are located in California, Texas, and New Jersey.
Strategic Alignment and Market Assessment
Laurence Bastien, Managing Director of Real Estate Investments for North and South America at PSP Investments, highlighted that the US logistics sector is currently characterised by “sustainable demand drivers and structurally limited supply.” The partnership with Ares provides his firm with an operational platform that “will generate value at the asset level.”
Bastien added that PSP Investments' real estate strategy focuses on best-in-class operators in sectors with the highest conviction – and this joint venture combines both.
