Net Lease Market Revs Up for Rush of Real Estate Deals in ‘22

January 20, 2022 - SLB Capital Advisors shared insights with regard to new entrants in the sale leaseback space.

  • SLB Capital Advisors’ managing partner Scott Merkle shared insights with regard to new entrants in the sale leaseback space.
  • A range of new players bulked up their net lease businesses last year or launched new platforms, including Apollo Global Management, Ares Management, KKR, Blue Owl Capital and Bridge Investment Group. And more may join the fray, said Scott Merkle, managing partner at SLB Capital Advisors, a net lease sale-leaseback advisory firm.
  • “Historically, the net lease space has been a bit sleepy in terms of new entrants, maybe with one a year over the past decade,” he said. “But since the start of the pandemic, it’s been a steady drumbeat of new players. I think we’re going to see more new entrants – we know of a couple of brand new [managers] thinking about it.”
  • An SLB forecast also emphasizes that high real estate prices making deals attractive, low financing costs for all players and a huge amount of dry powder for private equity deals are all factors signaling a busy 2022 for deals. It helps that mergers and acquisitions activity tailed off at the end of last year, creating a backlog for early this year, Merkle said.
  • “There was a lot of M&A targeted for year-end closes that were pushed into 2022,” [Merkle] said. “So, we do see strong momentum for activity to continue throughout this year.”