November 2, 2022
VIA EDGAR
Mr. William Demarest
Staff Accountant
Office of Real Estate and Construction
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, DC 20549
| Re: | Ares Real Estate Income Trust Inc. (the “Company”) |
| Form 10-K for the year ended December 31, 2021 | |
| Filed March 14, 2022 | |
| File No. 000-52596 |
Dear Mr. Demarest:
We are writing in response to the comment letter from the Staff of the Commission’s Division of Corporation Finance, dated October 14, 2022, regarding the Company’s Form 10-K for the year ended December 31, 2021. For your convenience, we have reproduced below the comment from the comment letter and included the Company’s response.
Form 10-K for the Fiscal Year Ended December 31, 2021
Additional Measures of Performance
Net Income and NOI, page 75
| 1. | We note that your disclosure under this heading references the reconciliation on page 72, which appears to be in the form of a full non-GAAP income statement. In future periodic filings, to avoid a non-GAAP prominence issue, please include a reconciliation that begins with the most directly comparable GAAP measure, which appears to be Net income, and reconciles down to NOI. Refer to Question 102.10 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations. |
Response: A revised version of the reconciliation referenced is shown on the next page. This reconciliation begins with net income. The Company will present the reconciliation in this manner in its future periodic filings.
Mr. William Demarest
November 2, 2022
Page Two
| For the Year Ended | ||||||||
| December 31, | ||||||||
| (in thousands) | 2021 | 2020 | ||||||
| Net income (loss) attributable to common stockholders | $ | 30,754 | $ | (14,914 | ) | |||
| Debt-related income | (9,174 | ) | (2,347 | ) | ||||
| Real estate-related depreciation and amortization | 74,415 | 62,923 | ||||||
| General and administrative expenses | 8,797 | 7,548 | ||||||
| Advisory fees, related party | 21,433 | 17,211 | ||||||
| Performance participation allocation | 15,327 | 4,608 | ||||||
| Acquisition costs and reimbursements | 2,636 | 1,108 | ||||||
| Litigation expense | — | 2,500 | ||||||
| Impairment of real estate property | 758 | — | ||||||
| Equity in income from unconsolidated joint venture partnerships | (114 | ) | — | |||||
| Other income | (1,852 | ) | (1,037 | ) | ||||
| Interest expense | 70,494 | 58,747 | ||||||
| Gain on sale of real estate property | (77,857 | ) | (13,335 | ) | ||||
| Net income (loss) attributable to redeemable noncontrolling interests | 221 | (54 | ) | |||||
| Net income (loss) attributable to noncontrolling interests | 3,565 | (1,091 | ) | |||||
| Net operating income | $ | 139,403 | $ | 121,867 | ||||
| Less: Non-same store NOI | 35,846 | 21,884 | ||||||
| Same store NOI | $ | 103,557 | $ | 99,983 | ||||
The Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filings; (ii) staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and (iii) the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If you need any additional information, or if we can be of any further assistance, please call me at (303) 597-0432.
| Sincerely, | |
| /s/ Lainie P. Minnick | |
| Lainie P. Minnick | |
| Managing Director, Chief Financial Officer and Treasurer |
| cc: | Christopher R. Stambaugh, Esq. DLA Piper LLP (US) |