LOS ANGELES-Astrum Investment Management has initiated a CRE private equity investment fund it calls Sale Lease-Back Buy-Back, or SLB3. It has already used the system to acquire five industrial properties in three states.

The fund's strategy works like this: AIM purchases properties directly from corporate owner-users. The property is then leased back to the former owner for 20 years, with the right to purchase it back at the end of five years at a pre-determined purchase price. The goal, Astrum claims, is to serve owner-users who want to own their corporate real estate over the long-term, but require liquidity to grow.

For investors, the SLB3 structure will seek to purchase real estate at what it terms “opportunistic prices,” deliver a high current income and long-term capital appreciation with reduced risk. AIM's investors will receive an 8.5% preferred return and claims it anticipates earning an average cash-on-cash of 11.25%.

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