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Carlyle Buying Net-Lease Business For $3B


Private equity giant Carlyle Group, through its global credit unit, has agreed to acquire iStar’s net-lease business for about $3B. IStar's net-lease portfolio includes 18.3M SF of U.S. office, industrial and entertainment properties.

As part of the deal, iStar’s net-lease investment team overseeing the portfolio, including Barclay Jones, who has led iStar’s net-lease efforts for more than 20 years, will come to work for Carlyle.

“We expect to grow this net lease strategy into a $10 billion business with a focus on making the product available to the retail channel over time,” Carlyle Head of Global Credit Mark Jenkins said in a statement

Carlyle is sitting on a war chest of $84B in capital to invest, according to its fourth-quarter 2021 earnings report.

The deal represents Carlyle's latest expansion into net-lease real estate, which the company kicked off last year by providing as much as $300M in growth capital to New Jersey-based Four Springs Capital Trust. That company is a net-lease specialist owning industrial, medical and retail properties nationwide.

Carlyle is expanding into real estate as part of a build-out of its global credit business. The company's global credit platform, which Carlyle says has been its fastest-growing business over the past three years, now has $66B in assets under management.

Real estate credit is of increasing interest to investors due to the premium offered by illiquid assets such as real estate, and as a hedge against inflation, Bloomberg reports.