Aries Capital Launches Net Lease Platform with a 'Lyft'

Transportation is critical in and around hub cities such as Atlanta and the Southeast continues to gain favor from investors.

This week Aries Capital, a Chicago-based real estate investment firm, launched its industrial net lease private equity platform with the acquisition of Lyft’s Atlanta Driver Service Center.

The property is strategically located in one of the largest intermodal hubs in the Southeast, with frontage to Interstate 75, and within four miles of Hartsfield Jackson Atlanta International Airport (the world’s busiest airport in 2021). 

Aries Capital Private Equity acquired the newly renovated asset for approximately $6.5 million from Icarus Alternatives, an Atlanta-based development firm.

Aries’ strategy was launched in Q2 2021 to invest in a diversified portfolio of operationally critical industrial and logistics assets throughout the Southeast. The platform targets triple-net and sale-leaseback opportunities in the lower middle-market with long-term corporate tenants, with a focus on transaction values between $5 million and $25 million. 

The acquisition of Lyft’s Atlanta Driver Service Center marks the platform’s inaugural transaction in one of Aries’ core target markets. The newly renovated light-industrial facility is 100% net-leased to Lyft and serves as its sole Atlanta Driver Service Center. 

The Lyft Driver Service Program offers drivers heavily discounted vehicle maintenance and repair services and free diagnostics, as well as serves as a local and central co-working hub for drivers. As of July 2021, Lyft has opened nine such facilities across the country and is committed to no more than one in each major market, supporting the mission-critical nature of this asset.

Logistics and Last-Mile CRE in Demand

Colin Couch, Stan Johnson Company Associate Director in Atlanta, tells GlobeSt that the Southeast has been one of the more active regions for industrial investment and development in recent years.

“It’s no surprise to see a new portfolio focused on product acquisition in this area,” Couch said. “The region continues to see robust population growth with Atlanta as the primary hub for the Southeast, but the region also has a number of attractive, growing secondary and tertiary markets across Florida, Tennessee and the Carolinas, among others.”

Seaport and airport markets, such as Savannah and Memphis, remain important amenities for the region as well, Couch said.

“Mission-critical facilities, especially those related to logistics and last-mile, are in very high demand with buyers, so the market can expect to see high levels of competition for these assets during fourth quarter and into 2022,” he said.

Aries Likes ‘Lower, Middle Market’

The strategy is helmed by Aries Capital Chairman and CEO Neil Freeman as Managing Principal, alongside six-year Aries Capital veteran Brandon Perdeck as Director of Capital Markets and former Ares Management investment professional Matt Carney as Director of Acquisitions.

“In addition to Lyft’s focus on improving cost-side economics to drive retention, this asset is a critical operational component of Lyft’s Express Drive program, which offers company-owned vehicles available for lease, driving significant incremental revenue at this location,” Freeman said.

“This transaction highlights Aries’ institutional approach to transacting in the fragmented lower middle-market at an attractive basis with strong in-place tenants. Our longstanding relationships across the industry provide unique access to both proprietary deal flow and bespoke financing solutions, widening our opportunity set and execution capabilities relative to traditional lower middle-market buyers,” Freeman added.