Brookfield’s Net Lease Platform Commands $2.2B
More than 460 properties are slated to change hands.
Starwood Property Trust has agreed to purchase Brookfield Asset Management’s Fundamental Income Properties for $2.2 billion. The net lease platform comprises 467 assets totaling 12 million square feet across 44 states.
Starwood will also assume Fundamental’s existing financing facilities, which total $1.3 billion, including $900 million of asset-backed security debt. The buyer expects to fund the remainder of the acquisition price by combining cash on hand, debt and equity capital, as well as 25.5 million shares of common stock in an underwritten public offering.
The asset collection is fully leased to 92 tenants operating across 56 industries, including food manufacturing and distribution, auto services, retail, restaurants, entertainment and education. The portfolio features a weighted average remaining lease term of 17 years, with 2.2 percent average annual rent increases.
READ ALSO: Net Lease Investment Volume Surges
Fundamental Income Properties amassed its portfolio through deals ranging between $5 million and $500 million, targeting single-tenant, triple-net lease assets with a lease base-term of 15 to 25 years. It acquired both single assets and portfolios.
The firm built its platform to meet the growing capital needs of middle market companies through the infusion of efficient liquidity, as well as the certainty of execution, Fundamental CIO Alexi Panagiotakopoulos said in a prepared statement.
This is the second major Brookfield transaction announcement this week. The company paid $428 million for a 3.6 million-square-foot collection of 53 light industrial assets. Stonelake Capital Partners sold the portfolio.
BofA Securities acts as Starwood Property Trust’s sole investment analyst. Wells Fargo and Evercore serve as Brookfield Asset Management’s financial advisors. The deal is expected to close on or before July 23, 2025, subject to customary closing conditions.
Net lease market on track for stabilization
Overall net lease cap rates nearly plateaued at 6.79 percent in June, marking an increase of only 1 basis point compared to March, according to a report by The Boulder Group. This points to stabilization in the market after three consecutive years of cap rate growth.
Investors’ flight to credit quality, tenant-occupied assets picked up during the second quarter, generating an increase in transaction volume. These assets traded at a cap rate below the 6 percent mark, going as low as mid-4 percent for corporate-occupied quick service restaurants.
You must be logged in to post a comment.