KKR Forms Platform to Buy Triple Net Lease Real Estate

Posted on 08/28/2021

Some institutional investors are looking to triple net lease (NNN) properties as record inflation in the US could boost cash flows for this type of property. KKR created Strategic Lease Partners, a new platform to invest in a diversified portfolio of triple net leasing properties. KKR’s investment, primarily from its loan and real estate funds, will enable the platform to acquire over $ 3 billion in assets. Seasoned 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 real estate and offer sale-leaseback solutions for corporate tenants. Prior to founding the KKR platform, Dallal and Mastrocola were Executive Directors at WP Carey Inc. where they were responsible for sourcing, evaluating, negotiating and structuring net leasing investments in North America. In the second quarter of 2021, the WP Carey REIT put $ 780 million in new opportunities at a weighted average cap rate of 5.6%.

Carlyle group
In early May 2021, The Carlyle Group Inc., through its global credit platform, agreed to provide New York-based Four Springs Capital Trust, a private real estate investment fund (REIT) with a focus on up to $ 300 million in growth capital to acquire, own and operate Management of a portfolio of single tenant income earning 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 rented to 56 individual renters across 31 different tenant types, divided into three main property types: industrial, medical and retail.
The trust’s top tenants include: Caliber Collision, Amazon.com, Inc, GAF, CVS Caremark, and Horizon Healthcare. Carlyle developed an in-depth and differentiated view of many of Four Springs’ tenants, drawing on the knowledge gained through direct investment in many of those tenants or through previous diligence with them and their competitors. Carlyle’s $ 59 billion global credit platform regularly tracks investments in privately negotiated capital solutions for medium-sized borrowers, including both private equity sponsored and family or entrepreneurial companies.