NEW YORK CITY AND ST. LOUIS — New York City-based investment manager BlackRock Inc. (NYSE: BLK) has announced plans to acquire net-lease real estate investment firm ElmTree Funds. BlackRock has entered into a definitive agreement with ElmTree, which has $7.3 billion in total assets under management as of March 31. The transaction is expected to close in the third quarter of 2025, subject to regulatory approvals and customary closing conditions.
Established in 2011 and based in St. Louis, ElmTree owns and operates real estate properties, with a focus on single-tenant, build-to-suit industrial assets. ElmTree’s portfolio includes investments in 122 properties across 31 states.
Additionally, ElmTree’s portfolio includes six office locations.
BlackRock’s upfront consideration will be paid primarily in stock, with the potential for additional consideration subject to ElmTree Funds’ performance over the next five years. Additional financial details were not disclosed.
Upon closing of the deal, ElmTree will be integrated into Private Financing Solutions (PFS), a new platform created through BlackRock’s combination with HPS Investment Partners. (BlackRock completed its acquisition of investment firm HPS earlier this month.)
“The net lease market is estimated at $1 trillion, and our continued belief in the industrial build-to-suit model is rooted in the mission-critical nature of this asset class,” says James Koman, CEO and founder of ElmTree. “By joining HPS and BlackRock, we are better positioned to meet market demand and serve our partners by growing alongside them for the long term.”
Koman will continue to head ElmTree. Long-term performance incentives included in the terms of the acquisition are designed to align the interests of BlackRock and ElmTree.
Skadden, Arps, Slate Meagher & Flom LLP; Fried, Frank, Harris, Shriver & Jacobson LLP; and Sidley Austin LLP are servings as legal counsel to BlackRock and HPS. Goldman Sachs & CO. LLC acted as financial adviser to HPS.
Berkshire Global Advisors and Kirkland & Ellis LLP served as financial advisor and legal counsel, respectively, to ElmTree Funds.
BlackRock had $11.6 in assets under management as of March 31. The company’s stock price closed on Thursday, July 3 at $1,082.15 per share, up from $790.19 a year ago, a nearly 37 percent increase.
— Hayden Spiess