Net Lease Capital, Public Pension Fund Ally to Invest

The joint venture announced the acquisition of 500 First Avenue, a 250,000 square foot industrial building, located in Gouldsboro, Pennsylvania. This is the first acquisition for the joint venture. The building is located outside of Scranton, Pennsylvania, and is currently 100% leased to an S&P “A” credit-rated tenant.

The joint venture combines the particular strengths of the firms involved. Net Lease Capital, which conducts a diversified set of business activities entirely within the net lease arena, brings the expertise of a specialized investment boutique with a broad reach in its niche. The pension fund brings ready capital for investment, and expands the capacity of Net Lease Capital to compete on larger deals. AEW brings 25 years of investment management experience and a wide range of experience in the financing and transaction markets across market cycles.

The joint venture will also enjoy other advantages in the market. Purchases will be made on a cash basis, allowing for rapid closings without financing contingencies. The venture is able to accommodate tenants and developers with expansion rights and forward commitments on future developments.

The pairing occurred initially during the bubble phase in the market, driven by a competitive buying environment and a low supply of quality net lease product. Investment credit corporate sale leasebacks, a major source of net lease product, had fallen off in recent years, partly due to low short term interest rates. Bruce MacDonald, President of Net Lease Capital explained: “Short supply of net lease properties, growing investor demand, and low interest rates have driven prices to unprecedented levels.” In this competitive environment, investors began turning to niche experts with existing relationships to source deals and with the expertise to efficiently underwrite corporate credit and the real estate fundamentals.

About Net Lease Capital Advisors

Net Lease Capital Advisors, with offices in greater Boston and New York, has three primary business units Acquisitions, Advisory, and Brokerage. The Acquisitions Group acquires net lease assets for the firm’s own account, as well as with joint venture partners. While Net Lease Capital has other institutional and private investment partners, this acquisition represents the firm’s first JV with a major public pension fund. The Acquisitions Group has purchased over $500 million in previous acquisitions. Net Lease Capital’s Advisory Group uses net lease properties and net lease financing as raw materials for 1031 and other tax strategies offered by the firm. The Brokerage Group monitors the nationwide net lease market and lists net lease properties for sellers. The firm has closed over $4 billion in net lease transactions.

About AEW Capital Management, L.P.

Since 1981, AEW Capital Management, L.P. (www.aew.com) has provided real estate investment advisory services to investors worldwide. AEW and its affiliates currently manage approximately $23 billion of capital, which is invested in over $33 billion of real estate and securities in the North America and Europe, on behalf of many of the world’s leading institutional and private investors. AEW has offices in Boston, Los Angeles, Paris, London, Barcelona, Milan, Stockholm, Luxembourg, Dusseldorf, Warsaw, Budapest and Prague.