BlackRock has taken another step into the private real estate market, announcing an agreement to acquire ElmTree Funds, a firm specializing in leasing purpose-built commercial properties to single-tenant occupants. The deal brings ElmTree’s $7.3 billion portfolio under the management of the world’s largest asset manager, furthering BlackRock’s efforts to diversify and strengthen its private market offerings.
ElmTree, founded in 2011 and based in St. Louis, manages a network of 122 net lease properties across 31 states, with offices in major cities including New York, Chicago, Austin, Phoenix, and Newport Beach. The company has built its reputation by focusing on industrial and mission-critical real estate, often developing facilities tailored for long-term corporate tenants.
This acquisition offers ElmTree the chance to broaden its reach as an owner-operator, leveraging BlackRock’s global scale and resources.
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The integration of ElmTree will occur within BlackRock’s newly created Private Financing Solutions (PFS) platform. PFS emerged earlier this year following BlackRock’s $12 billion acquisition of HPS Investment Partners, a credit investment firm. By bringing ElmTree into this structure, BlackRock aims to combine real estate expertise with robust financing capabilities, positioning itself to serve a wider range of institutional and private investors seeking stable, income-generating assets.
While the purchase price for ElmTree was not disclosed, BlackRock stated that the transaction will be paid primarily in stock, with additional compensation possible if ElmTree meets certain performance targets over the next five years. The deal is expected to close in the third quarter, pending regulatory approval.
James Koman, ElmTree’s founder and chief executive, expressed optimism about the partnership, noting that ElmTree’s experience in real estate development and management will be complemented by BlackRock and HPS’s ability to deliver financing and innovative solutions. BlackRock’s leadership, meanwhile, has pointed to the transaction as part of a broader strategy to expand in private markets, where higher fees and long-term growth opportunities are seen as increasingly attractive.
The move comes as the net lease real estate market shows signs of renewed momentum in 2025, with transaction volumes rising and institutional investors seeking out industrial and logistics properties for their resilience and stable income streams.
BlackRock’s entry, with its vast capital base and distribution network, is expected to intensify competition for high-quality assets and drive further innovation in deal structures and financing. The acquisition also signals confidence in the long-term prospects of the net lease sector, particularly as companies continue to seek specialized, mission-critical facilities across the United States.
This transaction follows BlackRock’s recent series of acquisitions in private markets, including the purchase of Global Infrastructure Partners and HPS Investment Partners.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
