Capital Automotive Real Estate acquired for $3.8B

McLean-based Capital Automotive Real Estate Services Inc. has been acquired by Los Angeles-based investment management firm Ares Management Corp. for $3.8 billion, Ares announced Thursday.

Ares bought the company from a Brookfield private real estate fund, according to a news release from Ares. The purchase was made with funds managed by Ares’ alternative credit strategy and real estate group.

Capital Automotive, a self-managed real estate company that provides sale-leaseback capital to automotive dealers around the country and Canada, has more than 250 real estate assets structured as long-term triple net leases.

“Our net lease capabilities sit at the nexus of our leading credit and real estate teams, providing us with a 360-degree view through which we can offer highly flexible net lease solutions,” Joel Holsinger, partner and co-head of Ares’ alternative credit business, said in a statement. “We are excited by growing market demand from sponsors and companies seeking a creative partner to help them unlock the value of their real estate assets. We are committed to being a partner of choice to them.”

Ares said it has accelerated its net lease activities and Ares’ funds have invested in more than 1,200 assets totaling $7.2 billion in the U.S. and Europe over the past 15 months. The investments include retail, industrial and office assets.

“I’m excited to be partnering with the team at Ares and believe that together we will be well-positioned to take advantage of the expanding opportunity set in the net lease market,” said Jay Ferriero, president and CEO of Capital Automotive. “Beyond the competitive edge of the Ares platform and the experience of the team, the strength of this partnership is reinforced through our shared commitment to accelerating positive social impact.”

As of Dec. 31, 2021, Ares had $306 billion of assets under management with 2,100 employees across North America, Europe, Asia Pacific and the Middle East.