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ElmTree Funds Sells $900 Million Net Lease Portfolio
[January 13, 2020]

ElmTree Funds Sells $900 Million Net Lease Portfolio


Today, ElmTree Funds ("ElmTree"), a leading real estate private equity manager, announced the sale of 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 $900 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 commented, "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."

ElmTree Funds is a widely recognized expert in the net lease sector, with a focus on build-to-suit projects and new construction. Its expertise in commercial real estate development, capital markets, and asset management enables it to optimize risk-adjusted returns for institutional investors.

Notable properties in the portfolio include:

  • 1.5 million square foot industrial facility net leased to a multi-billion U.S.-based confectionary manufacturer. The major distribution facility, located in Dallas, TX, is the first for the company in the region and the largest in its network, playing a key role in its US distribution plans. The lease is held by the parent company, which is rated A+. The asset is triple-net-leased for 11 years.
  • 500,000 square foot industrial facility net leased o a multi-billion U.S.-based multinational courier delivery services company. It is located in St. Louis, MO near Lambert International Airport, easily accessible via three interstates. The lease is held by the parent company, which is rated BBB. The asset is triple-net-leased for a period of 14 years.
  • 375,000 square foot industrial facility net leased to a multi-billion U.S.-based corrugated packaging company. It is located in Valley, AL, right off I-85, providing access to markets nearby including Atlanta, GA and Birmingham, AL. The lease is guaranteed by the tenant's parent company, which is rated BBB. The asset is triple-net-leased for a period of 11 years.



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 recapitalization by Guggenheim marks the third such transaction ElmTree's managing partners have executed in the past 10 years.


About ElmTree Funds

ElmTree Funds, LLC, headquartered in St. Louis, Missouri, is a real estate private equity firm that manages capital on behalf of institutional and private investors. ElmTree's investment philosophy focuses on creating attractive risk-adjusted returns for its investors in the commercial real estate net lease and build-to-suit sectors with a focus on industrial and office properties. Since its founding in 2011, ElmTree Funds has acquired, developed, or financed an extensive portfolio of commercial real estate. ElmTree Funds targets investments in primary and secondary markets across the United States that are net-leased to investment grade tenants on a long-term basis.

About Guggenheim Investments

Guggenheim Investments is the global asset management and investment advisory division of Guggenheim Partners, with more than $213 billion¹ in total assets across fixed income, equity, and alternative strategies. We focus on the return and risk needs of insurance companies, corporate, and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. Our 295+ investment professionals perform rigorous research to understand market trends and identify undervalued opportunities in areas that are often complex and underfollowed. This approach to investment management has enabled us to deliver innovative strategies providing diversification opportunities and attractive long-term results.

1. Guggenheim Investments assets under management are as of 9.30.2019. The assets include leverage of $11.8bn for assets under management. Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Funds Distributors, LLC, GS GAMMA Advisors, LLC, Guggenheim Partners Europe Limited, and Guggenheim Partners India Management.


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