An investment in Ares Industrial Real Estate Income Trust (AIREIT) is subject to significant risks. A summary of some of the more important risks is below. A more detailed description of the risks associated with the offering is found in the section of the prospectus entitled “Risk Factors.” Investors should read and understand all of the risk factors before making a decision to invest in shares of AIREIT’s common stock.
This sales and advertising literature must be read in conjunction with the AIREIT prospectus in order to understand fully all of the implications and risks of the offering of securities to which it relates. This document must be preceded or be accompanied by the AIREIT prospectus, which contains important information about AIREIT. This is neither an offer to sell nor a solicitation of an offer to buy the securities described in the AIREIT prospectus. The offering is made only by the AIREIT prospectus. Neither the Securities and Exchange Commission (SEC) nor any other state securities regulator has approved or disapproved of the securities or determined if the prospectus is truthful or complete. In addition, the Attorney General of the State of New York has not passed on or endorsed the merits of the offering. Any representation to the contrary is unlawful.
- Past performance is not a guarantee of future results. Investing in shares of AIREIT’s common stock involves a high degree of risk.
- REITs are not suitable for all investors. AIREIT is subject to various risks related to owning real estate, including changes in economic, demographic and real estate market conditions. Due to the risks involved in the ownership of real estate and real estate-related investments, the amount of distributions AIREIT may pay to stockholders in the future, if any, is uncertain, there is no guarantee of any return on investment and stockholders may lose the amount they invest.
- AIREIT anticipates that its investment in real estate assets will be primarily concentrated in the industrial real estate sector and that its investments will be concentrated in the largest distribution and logistics markets in the United States. Such industry concentration may expose AIREIT to the risk of economic downturns in this sector to a greater extent than if its business activities included investing a more significant portion of the net proceeds of the offering in other sectors of the real estate industry; and such market concentrations may expose AIREIT to the risk of economic downturns in these areas. In addition, if AIREIT’s tenants are concentrated in any particular industry, any adverse economic developments in such industry could expose AIREIT to additional risks. These concentration risks could negatively impact AIREIT’s operating results and affect its ability to make distributions to its stockholders.
- Further, investing in AIREIT’s common stock involves additional and substantial risks specific to AIREIT, including, among others, that:
- AIREIT has a limited operating history and there is no assurance that it will be able to achieve its investment objectives. AIREIT have experienced net loss, as defined by generally accepted accounting principles.
- There is no public trading market for shares of AIREIT’s common stock, and AIREIT does not anticipate that there will be a public trading market for its shares, so redemption of shares by AIREIT will likely be the only way to dispose of stockholders’ shares. AIREIT’s share redemption programs will provide stockholders with the opportunity to request that AIREIT redeems stockholders’ shares on a monthly basis, but AIREIT is not obligated to redeem any shares and may choose to redeem only some, or even none, of the shares that have been requested to be redeemed in any particular month, in its discretion. In addition, redemptions will be subject to available liquidity and other significant restrictions. Further, AIREIT’s board of directors may modify, suspend or terminate its share redemption programs if it deems such action to be in AIREIT’s best interest and the best interest of its stockholders. As a result, AIREIT’s shares should be considered as having only limited liquidity and at times may be illiquid.
- A portion of the proceeds received in this offering is expected to be used to satisfy redemption requests. Using the proceeds from this offering for redemptions will reduce the net proceeds available to retire debt or acquire properties, which may result in reduced liquidity and profitability or restrict AIREIT’s ability to grow its NAV.
- The transaction price will not accurately represent the value of AIREIT’s assets at any given time and the actual value of a stockholder’s investment may be substantially less. AIREIT’s board of directors arbitrarily determined the initial transaction price in its sole discretion and it is not based on the value of any assets AIREIT may own when a stockholder purchases shares in this offering. Until AIREIT commences monthly valuations, the transaction price will be fixed and will not be adjusted based on the underlying value of any assets it may own. Once AIREIT commences monthly valuations, the transaction price generally will be based on AIREIT’s most recently disclosed monthly NAV of each class of common stock (subject to material changes as described above) and will not be based on any public trading market. In addition, the transaction price will not represent AIREIT’s enterprise value and may not accurately reflect the actual prices at which AIREIT’s assets could be liquidated on any given day, the value a third party would pay for all or substantially all of AIREIT’s shares, or the price at which AIREIT’s shares would trade on a national stock exchange. Further, AIREIT’s board of directors may amend its NAV procedures from time to time.
- This is a “blind pool” offering; stockholders will not have the opportunity to evaluate all of the investments AIREIT will make before it makes them.
- This is a “best efforts” offering and if AIREIT is unable to raise substantial funds, then AIREIT will be more limited in its investments.
- AIREIT may change its investment policies without stockholder notice or consent, which could result in investments that are different from those described in this prospectus.
- Some of AIREIT’s executive officers, directors and other key personnel are also officers, directors, managers, key personnel and / or holders of an ownership interest in the Advisor, the Dealer Manager, and / or other entities related to AIREIT Advisors Group LLC, the parent of the Advisor and the sponsor of this offering, or the “Sponsor.” As a result, they face conflicts of interest, including but not limited to conflicts arising from time constraints, allocation of investment and leasing opportunities, and the fact that certain of the compensation the Advisor will receive for services rendered to AIREIT is based on AIREIT’s NAV, the procedures for which the Advisor assists AIREIT’s board of directors in developing, overseeing, implementing and coordinating. AIREIT expects to compete with certain vehicles sponsored or advised by affiliates of direct and indirect owners of the Sponsor for investments and certain of those entities may be given priority with respect to certain investment opportunities.
- The amount of distributions AIREIT may make is uncertain. AIREIT may pay distributions from sources other than cash flow from operations, including, without limitation, from the sale of assets, borrowings, return of capital, offering proceeds, or advances or the deferral of fees and expense reimbursements, and AIREIT may be required to fund monthly distributions from a combination of its operations and financing activities, which include net proceeds of this offering and borrowings (including borrowings secured by its assets), or to reduce the level of its monthly distributions. AIREIT has not established caps on the amount of the distributions that may be paid from any of these sources.
- If AIREIT fails to qualify as a REIT, it would adversely affect its operations and its ability to make distributions to its stockholders.
- This material contains forward-looking statements, including statements concerning investment objectives, strategies, other plans and objectives for future operations or economic performance that are based on AIREIT’s current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties, as described in more detail in the “Risk Factors” section of the prospectus and in this sales material. Any of these statements could prove to be inaccurate, and actual events or investments and results of operations could differ materially from those expressed or implied in the forward-looking statement. Investors are cautioned not to place undue reliance on any forward-looking statements.
- Ares Real Estate Income Trust Inc. (AREIT) is also sponsored by affiliates of Black Creek Group, LLC (Black Creek Group). DPF offers a share redemption program that limits the number of shares to be redeemed during any period. From 2009 through the third quarter of 2016, AREIT received redemption requests from Class E stockholders that exceeded the limits under AREIT’s Class E share redemption program (the Class E SRP), and, in order to supplement the limited liquidity provided by the Class E SRP, AREIT conducted a number of self-tender offers. As a result, AREIT stockholders who sought to have their shares redeemed or purchased by AREIT through a self-tender offer during this period were only able to have a portion of their shares redeemed or purchased, and were required to resubmit their requests to have their shares redeemed or purchased periodically. Beginning with the fourth quarter of 2016 through June 30, 2019, AREIT has redeemed all redemption requests received from all stockholders. In addition, AREIT lowered its quarterly distribution rate from $0.15 to $0.125 and then to $0.0875 per share between 2011 and 2014. In the first quarter of 2015, AREIT raised the quarterly distribution rate to $0.09 per share and then raised the quarterly distribution rate to $0.0938 for the first quarter of 2018. AREIT has paid distributions at that quarterly rate through December 31, 2019.
- THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED IN THE ARES INDUSTRIAL REAL ESTATE INCOME TRUST PROSPECTUS. THE OFFERING IS MADE ONLY BY THE ARES INDUSTRIAL REAL ESTATE INCOME TRUST PROSPECTUS. THIS MATERIAL MUST BE PRECEEDED OR ACCOMPANIED BY AN ARES INDUSTRIAL REAL ESTATE INCOME TRUST PROSPECTUS.
Shares will be offered to the public through Black Creek Capital Markets, LLC, which will act as the managing dealer, and through other members of the Financial Industry Regulatory Authority (FINRA) or with the assistance of registered investment advisors. Securities are not FDIC-insured, nor bank guaranteed, and may lose value.
Please see the prospectus for a complete list of defined terms and discussion of the risks associated with the offering.