CBRE’s investment management arm has acquired a 5-year-old net lease company with assets totaling 12M SF across the U.S.
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CBRE Investment Management purchased Cerberus Capital Management’s Tenet Equity business for $1.6B, both sides of the transaction announced in separate news releases Tuesday. CBRE said it made the investment on behalf of several of its investment strategies but didn’t disclose which ones.
Net leases are real estate arrangements in which tenants are responsible for fees typically associated with ownership, like insurance, maintenance and taxes. This is often executed through leaseback deals, in which a business sells its property for a cash infusion and then leases it back to remain a tenant.
Along with the acquisition, CBRE is launching a new strategy to further invest in net lease properties. Akash Shivashankara, a CBRE IM senior portfolio manager, will be heading that strategy.
CBRE IM says it sees opportunity in the “large and fragmented” net lease world.
“CBRE Investment Management conservatively estimates that several trillion dollars of corporate-owned operational real estate sits on the company balance sheets of middle market companies in North America, with institutions holding just 1% of the addressable market,” it said in its release.
Cerberus formed Tenet Equity, a REIT backed by institutional capital, in 2021. The company focuses on middle-market tenants and owns properties across 39 states, housing more than 65 tenants.
Truist Securities was CBRE IM’s financial adviser. Evercore was Cerberus’ financial adviser, and Kirkland & Ellis was its legal counsel.
In other net lease investment news, J.P. Morgan on Wednesday announced that it raised $1.1B for a net lease fund focused on long-term triple-net-leased industrial and outdoor storage assets. The fundraise outpaced its $500M target.
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