ElmTree Funds Launches Two Industrial-Focused REITs

ElmTree Funds, a commercial real estate-focused private equity firm, launched ElmTree Industrial Trust, Inc. and ElmTree Industrial Access Trust, Inc., two perpetual-life REITs that will buy and manage a portfolio of net lease industrial properties in the U.S.

The REITs will issue an unlimited number of shares to accredited investors for an initial price of $1,000 per share. ElmTree Industrial Trust is offered to RIAs, whereas ElmTree Industrial Access Trust is open to independent broker-dealers.

“With the growth of e-commerce, the reshoring of supply chain operations, and the movement from just-in-time inventory to just-in-case inventory, we believe that tenant demand will continue to outpace supply for the foreseeable future, resulting in positive net absorption and rental growth going forward,” said James G. Koman, ElmTree CEO and founder.

The REITs intend to invest mainly in single-tenant, stabilized, income-producing industrial properties with long-term net leases and comparable build-to-suit industrial properties. The REITs may also provide loans backed by industrial properties or invest in real estate-related securities.

The REITs’ initial investment is the acquisition of a 169,543 square-foot industrial property in St. Louis, MO. The property is 100% leased to the BASF Corporation, a European multinational company.

The REITs are intended to be sold on a continuous basis. The purchase price will vary quarterly to reflect the REITs’ net asset value (NAV), once the NAV is determined, about two years after the REITs’ initial purchase sale.