BlackRock is acquiring ElmTree Funds, a US net-lease real estate investment firm, which manages $7.3bn (€6.2bn) in assets.
BlackRock said it has agreed to offer an initial payment for the firm, primarily in stock, with the possibility of additional payments based on certain targets being met over the next five years.
Founded in 2011, ElmTree operates in the commercial net-lease sector, specialising in single-tenant, build-to-suit assets. It has established relationships with corporations and developers, with six office locations and investments in 122 properties across 31 US states.
Once the deal closes, ElmTree will be integrated into Private Financing Solutions (PFS), a new platform formed following BlackRock’s acquisition of HPS Investment Partners.
Scott Kapnick, chairman of PFS executive office and CEO of HPS, said: “Structural shifts in the real estate sector are creating new opportunities for private capital. The combination of a premier triple-net investor with our leading private financing solutions platform will position us to capture these opportunities for our clients.
“ElmTree has the team, expertise and relationships that will help drive growth and deliver differentiated investment solutions, and we are thrilled to welcome Jim and his entire team.”
ElmTree CEO and founder James Koman said: “The net-lease market is estimated at $1trn and our continued belief in the industrial build-to-suit model is rooted in the mission-critical nature of this asset class. Our specialised bricks-and-mortar expertise will be augmented by HPS’s ability to provide financing and other solutions that fuel the corporations and developers driving the economy forward.
“By joining HPS and BlackRock, we are better positioned to meet market demand and serve our partners by growing alongside them for the long term.”
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