Carlyle Group is acquiring real estate investment trust iStar's net lease business for an enterprise value of approximately $3 billion, a spokeswoman said.
Equity funding for the deal will come from capital from Carlyle's credit business and a minority balance sheet investment.
"Acquiring iStar's net lease business jump starts our real estate credit strategy, quickly giving us scale to accelerate deployment," said Mark Jenkins, managing director and head of global credit at Carlyle, in a news release. "We expect to grow this net lease strategy into a $10 billion business with a focus on making the product available to the retail channel over time."
When the transaction closes, expected sometime in the first quarter, Carlyle's credit business will gain a portfolio of 18.3 million square feet of triple-net leases spanning industrial, office and entertainment properties.
IStar's net lease investment team that has been overseeing the portfolio led by Barclay Jones, executive vice president, and Catherine Tenney, senior vice president, will join Carlyle's real estate credit team. Roger Cozzi, managing director and Carlyle's head of real estate credit, was iStar's CIO and co-head of its investment committee from 1995 to 2007 and played a key role in acquiring much of its net lease portfolio, the news release said.