Ares Industrial REIT Posts $118.5M Net Loss in Q3; 51% of Distributions Funded by Operations
Ares Industrial Real Estate Income Trust Inc., a monthly net asset value real estate investment trust sponsored by Ares Management Corporation, reported a net loss of $118.5 million for the nine months ended Sept. 30, 2025, widening from a $92.2 million loss a year earlier.
Funds from operations for the third quarter totaled $20.37 million, down 27% from $27.91 million in the third quarter of 2024. Adjusted FFO rose 41.8% year over year to $25.73 million. On a per-share basis, FFO was $0.06, compared to $0.09 in the prior-year period.
The year-over-year decline in net results was primarily due to the absence of property dispositions during the period – compared with a $56.9 million net gain from the sale of 12 industrial buildings in the third quarter of 2024. In addition, the REIT incurred an $18.4 million increase in interest expense and a $6.3 million decrease in unrealized gains on financing obligations.
The company, also known as AIREIT, declared fourth quarter monthly distributions totaling $0.15750 per share for all classes of common stock. The company noted that approximately 51.3% of its gross distributions for the first nine months of 2025 were paid from cash flows from operating activities. The remaining 48.7% of gross distributions were funded with proceeds from shares issued pursuant to the company’s distribution reinvestment plan and other financing activities.
Total revenues for the nine months ended Sept. 30 increased to $437.2 million, up $49 million compared to the same period in 2024, primarily driven by growth in its real estate portfolio and higher debt-related income.
Rental revenues grew by $41.9 million, reflecting portfolio expansion and higher base rents across the existing “same store” portfolio.
Debt-related income increased by $7.1 million due to higher average outstanding debt investment balances and prepayment fees earned during the period.
Net asset value per share increased to $13.05 as of Sept. 30, up from $12.62 in Q3 2024.
The company added eight industrial buildings totaling approximately 1.6 million square feet to its portfolio during the nine-month period for an aggregate purchase price of $207.5 million. It also executed 64 separate transactions, leasing approximately 5.9 million square feet, which included 4.5 million square feet of renewals at an average annual base rent of $10.13 per square foot.
The company continued to employ a multi-faceted capital raising strategy, including its Delaware statutory trust program for 1031 exchanges and ongoing public and private equity offerings. The company raised approximately $247.1 million in gross proceeds from the sale of common stock and $162.9 million through its private placement DST program. Of the latter, $5.5 million was financed through DST program loans.
Through Q3 2025, AIREIT said it continued to employ a multi-faceted approach to raising capital, emphasizing its Delaware statutory trust program for 1031 exchanges alongside its ongoing public and private share offerings.
During the period, the company redeemed 15.8 million shares of common stock for $203.5 million.
In March, AIREIT refinanced and amended its unsecured credit facility, increasing its potential size to $2.9 billion. As of Sept. 30, the REIT reported approximately $4.4 billion in total outstanding borrowings and a leverage ratio of 45.3%.
As of the close of the third quarter, the Ares company’s portfolio included 263 industrial buildings totaling approximately 56.4 million square feet across 31 U.S. markets. The portfolio was 91.7% occupied (92.2% leased), with a weighted-average remaining lease term of approximately 3.8 years.
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