BlackRock Inc. agreed to buy real estate firm ElmTree Funds, which leases built-to-suit commercial properties to single-tenant renters, adding an investor with $7.3 billion in total assets under management.
ElmTree will be integrated into Private Financing Solutions, the new platform created through BlackRock’s $12 billion purchase of credit firm HPS Investment Partners last year.
Payment for ElmTree will be primarily in stock, with the potential for additional consideration based on ElmTree’s performance over the next five years, BlackRock said in a statement Monday. The purchase price and other financial details weren’t disclosed.
Founded in 2011, ElmTree has offices in St. Louis, New York, Chicago, Austin, Phoenix and Newport Beach, California, and investments in 122 properties in 31 U.S. states.
The deal will allow ElmTree, which focuses on industrial real estate, to expand into new markets as an owner-operator, according to the statement. The transaction is expected to be completed in the third quarter.
“Our specialized bricks-and-mortar expertise will be augmented by HPS’s ability to provide financing and other solutions,” James Koman, ElmTree’s founder and chief executive officer, said in the statement.
While the purchase is tiny compared to the $11.6 trillion in assets that BlackRock oversees, it furthers CEO Larry Fink’s push into private markets over the past two years in search of heftier fees. BlackRock has bought HPS and Global Infrastructure Partners as part of its acquisition spree.
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