Julie Solomon

Ares notes that data center growth directly impacts logistics real estate. E-commerce is moving from 15% to 35% of retail, and AI is driving faster fulfillment needs. Data centers and logistics compete for similar land/power near population centers. As data centers consume land, the supply of prime logistics space tightens, driving up rents for industrial REITs like Prologis (PLD). Long Industrial/Logistics Real Estate. Economic slowdown reducing consumer spending and shipping volume.

Ares Management is underweight Office but heavily invested in Data Centers, stating "we can't get enough" compute infrastructure. The AI boom requires massive physical infrastructure. While commercial office space is "bifurcated" and struggling, the demand for data centers is secular and disconnected from the broader real estate malaise. LONG. Real Estate exposure should be concentrated in the physical backbone of the internet. Power supply constraints or overbuilding in the sector.

Ares Management is underweight Office but heavily invested in Data Centers, stating "we can't get enough" compute infrastructure. The AI boom requires massive physical infrastructure. While commercial office space is "bifurcated" and struggling, the demand for data centers is secular and disconnected from the broader real estate malaise. LONG. Real Estate exposure should be concentrated in the physical backbone of the internet. Power supply constraints or overbuilding in the sector.