ElmTree Funds sells USD900m net lease portfolio

ElmTree Funds (ElmTree), has sold a majority position in a portfolio of predominantly industrial and office properties to Guggenheim Investments (Guggenheim). The gross asset value of the 18-property portfolio is approximately USD900 million.

ElmTree first began acquiring and developing these properties in 2016. Located in fast-growing metropolitan areas across the United States, this portfolio of build-to-suit net lease properties offers a steady income stream and capital appreciation over the long term. As part of the transaction, ElmTree will manage the assets for Guggenheim and maintain a small equity portion.

CEO and Founder of ElmTree Funds James Koman, says: “As the uncertain rate environment continues, pensions and other institutional investors have demonstrated a deep appetite for current and predictable income streams. The yields we’re seeing from real estate leased to investment grade tenants provide a compelling alternative to corporate equivalent bond yields, while offering potential upside.”

 

Jennifer Marler, Senior Managing Director and Head of Real Estate at Guggenheim Investments added, “We are delighted to partner with ElmTree and benefit from its differentiated approach to commercial real estate in our pursuit to drive value for our clients.”

 

This recapitalisation by Guggenheim marks the third such transaction ElmTree’s managing partners have executed in the past 10 years.