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BlackRock has announced its agreement to acquire ElmTree Funds, a St. Louis-based real estate private equity firm managing $7.3 billion in assets across 122 commercial properties in 31 U.S. states. ElmTree specializes in net-lease and build-to-suit industrial real estate, focusing on single-tenant corporate facilities that are considered mission-critical to tenants’ operations.
The acquisition will integrate ElmTree into BlackRock’s Private Financing Solutions (PFS) platform, which was recently formed following BlackRock’s purchase of HPS Investment Partners, a $148 billion credit manager. This move strengthens BlackRock’s position in the real estate debt market, adding ElmTree’s structuring capabilities and lending expertise to its growing private credit franchise.
📈 Strategic Highlights
- ElmTree deployed nearly $500 million in transactions in 2024, down from $2 billion in 2023
- The net-lease market is estimated at $1 trillion, offering significant growth potential
- BlackRock aims to raise $400 billion in private capital commitments by 2030, with ElmTree contributing to that goal
The deal, expected to close in Q3 2025, will be paid primarily in BlackRock stock, with additional performance-based incentives over five years. ElmTree CEO James Koman will continue to lead the firm’s investment strategies post-acquisition.
This acquisition underscores BlackRock’s strategic pivot toward private markets, diversifying its revenue streams beyond traditional ETFs and index funds. It also reflects broader investor interest in stable, income-generating assets amid macroeconomic uncertainty.
