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ST LOUIS—ElmTree Funds has recapitalized a 18-property net lease portfolio, selling its majority position to Guggenheim Investments. The deal values the industrial-and-office portfolio at $900 million.
As part of the transaction, ElmTree will manage the assets for Guggenheim and maintain a small equity portion.
This recapitalization by Guggenheim marks the third such transaction ElmTree's managing partners have executed in the past 10 years.
ElmTree first began acquiring and developing these build-to-suit net lease properties in 2016. Properties in the portfolio include a 1.5 million square foot industrial facility net leased to a US-based confectionery manufacturer in Dallas and a 500,000-square foot industrial facility net leased to a US-based multinational courier delivery services company in St. Louis, MO. There is also a 375,000-square foot industrial facility net leased to a US-based corrugated packaging company in Valley, Ala.
ElmTree CEO and founder James Koman told GlobeSt.com in an earlier interview that the company has been focusing on acquiring industrial assets lately, largely because of its stellar business case. "When you look at e-commerce, logistics and the demand by consumers for same day delivery service, we believe you will continue to see growth in this sector for at least the next couple of years," he said.
Cold Storage An Intriguing Possibility
Koman also told GlobeSt.com that the company is finding the cold storage space to be "very intriguing." It is part of the last mile delivery chain, he notes, and there is not a lot of ground up cold storage development taking place. "We are taking a deeper dive into the sector to understand what the growth will look like in a few years," he says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
