CBRE's Guy Ponticiello and James Scott arranged the transaction on behalf of Oak Street. A CBRE Capital Markets debt & structured finance team of Tom Traynor and James Millon in New York and Peter Marino in Chicago secured $1.1 billion in financing at 83% LTV for Stonemont.

“Our team engineered a capital structure consisting of $800 million of floating-rate CMBS and $274 million of mezzanine financing, in addition to preferred equity,” says EVP Millon. J.P. Morgan Chase provided the financing, along with Deutsche Bank and Barclays as co-lenders.

“The credit strength of the tenants, diversification of industries represented, along with asset types and geographies, made the offering one the highest quality net lease portfolios of scale to have hit the market in many years,” says Ponticiello, managing director, CBRE Capital Markets. “The interest from international and domestic investors coupled with lending sources drove an exceptional outcome for a seller who has an excellent track record on both the buy side and sell side.” Observes Oak Street CEO Marc Zahr, “You can't assemble a portfolio with that kind of predictable cash flow and downside protection overnight.”

ATLANTA—Stonemont Financial Group said Friday it had acquired a net lease portfolio from Chicago-based Oak Street Real Estate Capital for $1.3 billion. The deal, Stonemont's largest to date, was reported by the Wall Street Journal earlier this week.

Comprising 97 office, retail and industrial properties spread across 20 states, the 6.8-million-square-foot portfolio marks the first acquisition of Stonemont's new investment-grade income fund. The core-plus investment fund is focused on long-term, diversified assets, the WSJ reported.

“Given the high credit quality of the tenant base and strategic importance of the assets, we couldn't ask for a better portfolio to serve as the first acquisition under our new fund,” says Zack Markwell, CEO and managing principal of Stonemont. “This fund is truly one of a kind—it is the only investment-grade net lease fund diversified by tenant, geography and industry. We have an aggressive acquisition plan to grow the fund to meet investor demand for the superior risk-adjusted returns the fund offers.”

Oak Street will continue co-managing the 100% occupied portfolio, which derives 96% of its NOI from investment-grade tenants, with an average lease term of 12 years, according to the WSJ. They include six campuses occupied by MetLife Inc., along with offices occupied by Mylan Technologies Inc. and Ericsson AB, and stores occupied by Dollar General and other long-term tenants, the WSJ reported.

CBRE's Guy Ponticiello and James Scott arranged the transaction on behalf of Oak Street. A CBRE Capital Markets debt & structured finance team of Tom Traynor and James Millon in New York and Peter Marino in Chicago secured $1.1 billion in financing at 83% LTV for Stonemont.

“Our team engineered a capital structure consisting of $800 million of floating-rate CMBS and $274 million of mezzanine financing, in addition to preferred equity,” says EVP Millon. J.P. Morgan Chase provided the financing, along with Deutsche Bank and Barclays as co-lenders.

“The credit strength of the tenants, diversification of industries represented, along with asset types and geographies, made the offering one the highest quality net lease portfolios of scale to have hit the market in many years,” says Ponticiello, managing director, CBRE Capital Markets. “The interest from international and domestic investors coupled with lending sources drove an exceptional outcome for a seller who has an excellent track record on both the buy side and sell side.” Observes Oak Street CEO Marc Zahr, “You can't assemble a portfolio with that kind of predictable cash flow and downside protection overnight.”