Private equity real estate firm ElmTree Funds says it recently launched ElmTree Industrial Trust Inc. and ElmTree Industrial Access Trust Inc., two perpetual-life non-traded real estate investment trusts which will acquire and manage a diversified portfolio of net lease industrial properties across the United States.
ElmTree says the REITs will offer an unlimited number of shares to accredited investors at an initial purchase price of $1,000 per share. ElmTree Industrial Trust is available to registered investment advisers and ElmTree Industrial Access Trust is available to independent broker-dealers.
For its initial investment, the REITs acquired an industrial property located in St. Louis, Mo. The nearly 170,000-square-foot property is 100% leased to the BASF Corporation, a European multinational company and the largest chemical producer in the world.
“Industrial real estate has long been a cornerstone of the U.S. economy, and we believe the sector’s strong fundamentals will remain attractive over the long-term,” said James G. Koman, ElmTree’s chief executive officer and founder. “With the growth of e-commerce, the reshoring of supply chain operations, and the movement from just-in-time inventory to just-in-case inventory, we believe that tenant demand will continue to outpace supply for the foreseeable future, resulting in positive net absorption and rental growth going forward. We are very excited to launch these offerings and to pass these opportunities on to our partners.”
The REITs expect to primarily invest in single-tenant, stabilized, income-producing industrial properties with long-term net leases, along with similar build-to-suit industrial properties. To a lesser extent, the REITs may originate loans secured by industrial properties or invest in real estate-related securities.
As perpetual-life REITs, the REITs are intended to be sold on a continuous basis. Initially offered at $1,000 per share, the purchase price will vary on a quarterly basis to reflect the REITs’ net asset value, once the NAV is determined, approximately two years after the REITs’ initial purchase sale. ElmTree believes that the REITs’ structure allows the firm a greater chance to maximize shareholder distributions while also enhancing the REITs’ ability to acquire its sought-after assets.
Founded in 2011, ElmTree Funds is a private equity real estate firm focused on commercial real estate. ElmTree’s team of investment professionals have executed on more than $20 billion of real estate assets.
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