Atlanta Firm Teams Up With Goldman Sachs, Ares, Koch To Buy $1.1B Retail Portfolio
Argonne Capital Group is teaming up with a group of investment titans to buy a $1.1B portfolio of retail assets.
The Atlanta-based private equity firm is purchasing 59 multitenant retail assets from REIT Global Net Lease, with backing from Koch Real Estate Investments and funds from Goldman Sachs and Ares Management. The deal is the first of a pair between the firms that are set to close this year, with the buyers set to acquire 100 assets for roughly $1.8B.
Argonne Capital executed the deal through RCG Ventures, its real estate investment arm. The transaction included a new loan facility with Truist and Key Bank.
The deal more than doubles the footprint of the company's shopping centers in the U.S., and Argonne plans to further scale its platform going forward, founder Michael Klump said in a statement.
The remaining 41 properties are slated to be sold in two transactions that are expected to close by the middle of the year, pending approval on two loan assumptions, according to a release announcing this week’s deal.
Goldman Sachs Alternatives, a subsidiary of the investment bank, and Ares Management Alternative Credit funds are partnering with Argonne on the deal along with Koch and other institutional investors.
GNL began marketing the properties for sale last year as the REIT looked to reduce its debt load and improve its cost of capital. The sale was first announced in late February.
In all, the net lease REIT expects to sell $3B worth of assets between this year and last. It plans to use the proceeds to pay down its revolving credit facility and fund up to $300M in stock buybacks.
The REIT had a 1,121-property portfolio totaling 60.7M SF at the end of 2024. Roughly 80% of its assets were in the U.S. with a concentration in the Midwest and Southeast. Around 20% of its portfolio was European assets.
The trade with the Argonne group will allow GNL to “become a pure-play net lease REIT, concentrating on single-tenant assets,” the company said.
“The announcement marks a pivotal milestone in our strategic disposition initiative, offering a range of benefits with a clear emphasis on long-term value,” GNL CEO Michael Weil said in a February statement.
GNL’s stock was trading flat Wednesday morning. The stock is up roughly 8% this year.
The specific assets included in the sale weren't disclosed, and representatives for GNL and Argonne were unavailable early Wednesday for comment. The properties were previously described as trading at an 8.4% cash cap rate.
Retail assets are growing in popularity among investors after weathering the pandemic and remaining unfazed by the recent wave of retailer bankruptcies and closures.
Some mall landlords are looking at the recent bankruptcy of Forever 21, a longtime fast-fashion staple, as an opportunity, as growing demand has allowed them to boost rents.
