ST. LOUIS—ElmTree Funds, which was launched in St. Louis in 2011, has just closed on ElmTree Net Lease Fund II, its sixth net lease private equity fund, after receiving commitments of $325 Million, exceeding its $300 million target. Institutional investors made most of the commitments to the latest fund. Jim Koman, managing director and founder of ElmTree, declined to name the investors but said the largest allocations came from retirement systems and hedge funds.
ElmTree typically invests in single tenant, investment-grade net lease real estate assets, sale leasebacks, and build-to suits with tenant lease terms of 10 to 15 years. Company officials say ElmTree Net Lease Fund II will eventually acquire a billion dollars of net lease assets and has already completed the acquisition of over $400 million in properties. About two-thirds of the Fund’s current properties are build-to-suit. Tenants in the fund’s properties include Cardinal Health, United Technologies, GE, Caterpillar, and Tyco, among others.
“We have a unique, team-based approach to third-party development and project management for build-to suits that allows us to provide clients with customized, efficient, build-to-suit solutions designed to exceed all expectations,” said Koman in a prepared statement. He could not be reached for additional comment. “In today’s real estate environment, real opportunities lie in the office, industrial and specialty project development arena, and our fund has been successful due to our investments in these types of properties.”
“Our strategy for ElmTree Net Lease Fund II has been focused on identifying net lease properties in markets nationwide with low competition and the ability to generate a steady, predictable income stream over the life of an investment,” noted Joseph Yiu, managing director and chief investment officer for ElmTree. “The Fund will continue to seek opportunities in build-to-suits that are undervalued and/or demonstrate prospects for capital appreciation.”
ElmTree, which did not work with a placement agent, closed on the fund during the week of May 12th.