GLOBAL - Gordon DuGan and three other former W P Carey executives have launched a new investment company that will specialise in sale-and-leaseback real estate deals.
Northcliffe Asset Management is targeting the strategy on a global basis and hoping to capitalise on the growing market for sale-and-leasebacks and significant interest from institutional investors for secure, income-orientated real estate investments.
DuGan is joined by Benjamin Harris, Alistair Calvert and Michael Heal, all former employees of New York-based WP Carey, which itself specialises on the sector.
DuGan said: "We intend to build Northcliffe into the best-in-class global investment manager for sale-leasebacks and net leased investments.
"We expect to benefit from extraordinary opportunities available in the current economic climate."
DuGan said companies were climbing out of a period of turmoil and that their primary concerns were liquidity and capitalisation.
"They are looking at a variety of financing alternatives, such as sale-leasebacks," he said.
DuGan said the founders of Northcliffe had also seen unprecedented interest from investors, as "virtually no other real estate strategy offers the risk-adjusted cash returns of sale-leasebacks in this environment".
He added: "The European team already manages a successful net lease portfolio and is actively investing - the US team will begin shortly."
DuGan is a pioneer in sale-and-leaseback investments, with more than 20 years in the sector. He was appointed president of WP Carey in 1999, co-chief executive in 2002 and chief executive in 2005.
During that period, the company's assets under management rose from $2.5bn (€1.78bn) to around $10bn in 2010, making it the largest company in the investment sector worldwide.
DuGan resigned as chief executive of WP Carey in July this year.
He worked with Harris, WP Carey's head of US investments, for more than 12 years, including most recently on the $225m sale-and-leaseback of the iconic New York Times
Building to its newspaper tenant in 2009.
Harris resigned from WP Carey in September and has joined Northcliffe Asset Management as a partner in New York.
ThreadGreen Partners, founded in 2007 by Calvert, former head of the European office at WP Carey, and Heal will become the European operations of Northcliffe.
Calvert said: "The opportunities in sale-leaseback transactions have never been greater, with the spread between the rental yield on these investments and financing costs at historic highs.
"Constrained capital markets and the over-leveraged corporate sector have resulted in a huge supply of transactions.
"The undeveloped nature of the European market, which at $4trn has twice the level of owner occupied commercial property of the US, suggests this deal supply will continue."