ST. LOUIS—ElmTree Funds, which was launched in St. Louis in 2011, recently closed on ElmTree Net Lease Fund II, its sixth net lease private equity fund, and it just completed the acquisition of five single-tenant net lease investment properties, totaling $90.3 million. All of the properties are either currently occupied under, or have commitments for, 10- to 15-year lease agreements.
As reported in GlobeSt.com, ElmTree typically invests in single tenant, investment-grade net lease real estate assets, sale leasebacks, and build-to suits with tenant lease terms of 10 to 15 years. Company officials say ElmTree Net Lease Fund II will eventually acquire a billion dollars of net lease assets.
Among the acquisitions is a 34.4-acre industrial property in Fort Wayne, IN. BAE Systems Controls, a subsidiary of BAE Systems plc, will lease the property and use it as a light assembly and warehousing facility. The build-to-suit project will consist of the development and construction of an approximately 333,750-square-foot manufacturing building. BAE Systems has operated in Fort Wayne since the mid-1980s. The company will use the plant, scheduled to be completed in late 2015, to build electronic controls for aircraft engines.
ElmTree also acquired four office properties in Ohio, South Carolina, Minnesota and Alabama.
These include a 100,800-square-foot single-tenant facility in Columbus, OH. Alliance Data Systems has occupied the building, which sits on almost 10 acres at 220 W. Schrock Rd., since 1991. ADS serves clients such as Limited Brands, Abercrombie & Fitch and Lane Bryant. The office houses 900 employees and currently serves as the national control center for customer care. In 2006, the ownership spent about $2.2 million on property improvements and is currently revamping the data center.
A 39,794-square-foot, single-tenant facility, was also acquired by ElmTree in Lexington, SC. Carolina First Bank has occupied the building, which sits on a 3.72-acre land parcel, since 2011. The bank invested over $1 million after first taking possession of the property, which currently houses the bank's US compliance operations.
ElmTree also acquired a 75,601-square-foot, single-tenant facility in Arden Hills, MN. UTC Fire & Security, a wholly owned subsidiary of United Technologies Corp., has occupied the property under a lease agreement that began in 2004. The two-story, class B office building was constructed in 1986. UTC Fire & Security provides fire safety and security solutions to both US and international customers. The property sits on a five-acre land parcel near several large corporate headquarters such as Boston Scientific and Land O'Lakes.
Finally, ElmTree also acquired a 66,500-square-foot office and call center located on an 8.8-acre land parcel in Birmingham, AL. T-Mobile South, a fully owned regional subsidiary of T-Mobile US, Inc., currently occupies the property. It will undergo a $6 million renovation to suit T-Mobile's long-term needs, with completion of the renovations expected in early 2015. The call center employs around 500 full-time employees, and T-Mobile South plans to hire an additional 100 employees by 2015.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
