KKR Forms Platform to Buy Triple Net Lease Real Estate
Posted on 08/28/2021
Some institutional investors are betting on triple net leasehold (NNN) real estate, as record inflation in the United States could boost cash flow to these types of properties. KKR has created Strategic Lease Partners, a new platform to invest in a diversified portfolio of triple net leasehold real estate. KKR’s investment, primarily from its credit and real estate funds, will position the platform to acquire more than $ 3 billion in assets. Veteran net lease investors Andrés Dallal and Joseph Mastrocola will join Strategic Lease Partners as partners, working with KKR’s real estate, credit and capital markets teams to acquire NNN properties and deliver leaseback solutions to businesses tenants. Prior to the formation of the KKR platform, Dallal and Mastrocola were executive directors at WP Carey Inc., where they were responsible for researching, evaluating, negotiating and structuring net rental investments in North America. . In Q2 2021, WP Carey REIT deployed US $ 780 million in new opportunities at a weighted average cap rate of 5.6%.
In early May 2021, The Carlyle Group Inc., through its Global Credit platform, agreed to provide up to US $ 300 million in growth capital to New York-based Four Springs Capital Trust, a trust of New York. Private Real Estate Investment (REIT) focused on acquiring, owning and actively managing a portfolio of lucrative single-tenant properties in the United States, subject to long-term net leases. Four Springs plans to use the funds to expand its portfolio which currently includes 122 properties in 29 states. At the time, Four Springs’ 122 properties were leased to 56 unique tenants across 31 different tenant types that fall into three main property types: industrial, medical, and commercial.
The main tenants of the trust are: Caliber Collision, Amazon.com, Inc, GAF, CVS Caremark and Horizon Healthcare. Carlyle has developed an in-depth, differentiated view of many Four Springs tenants using the knowledge provided by directly investing in many of these tenants or past due diligence on them and their competitors. Carlyle’s $ 59 billion global lending platform routinely seeks investments in privately traded capital solutions for upper middle market borrowers, including privately sponsored businesses and family or entrepreneurial businesses.