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Starwood to Acquire Net Lease Platform from Brookfield
In the second institutional-level net lease acquisition in as many weeks, Starwood Property Trust, Inc. has entered into a definitive agreement to acquire Fundamental Income Properties, LLC, a fully integrated net lease real estate operating platform and owned portfolio, from Brookfield Asset Management for approximately $2.2 billion. The deal includes the assumption of approximately $1.3 billion in debt, including $900 million in ABS.
The Fundamental net lease portfolio consists of 467 properties spanning 12 million square feet across 44 states, 56 industries and 92 tenants. The 28-person Fundamental team will join Starwood Property Trust.
“When we went public in 2009, we said we would create a diversified company around the areas of expertise of our manager, Starwood Capital,” said Barry Sternlicht, chairman and CEO of Starwood Property Trust. “With the addition of another business cylinder, we are expanding into another proven, scalable segment with strong synergies with our platform.”
He continued, “Our core commercial real estate lending business is now approximately half of our asset base as we have strategically expanded into complementary lending and investing verticals. This diversification has allowed us to weather cycles and deliver consistent earnings and dividends for our shareholders, who have earned an average of 10.8% per year on their investment since our formation as a blind pool in 2009. The acquisition of Fundamental marks the next evolution, but not the last, of our platform.”
BofA Securities is serving as sole financial advisor to Starwood Property Trust. Wells Fargo and Evercore are serving as financial advisors to Brookfield Asset Management. The acquisition is expected to close on or around July 23.
The Starwood-Brookfield deal follows last week’s news that BlackRock will acquire ElmTree Funds, a net lease investment platform with $7.3 billion in assets under management.
- ◦Sale/Acquisition
