Disclaimer: The contents are for general opinions and do not constitute any investment advice. All remarks are solely for your information purpose and should be treated as education only. Trading and investment involving monetary fund carry RISK.
Goldman Unit Makes New Push Into Real Estate with Stake in Sale-Leaseback Firm
DJ Goldman Unit Makes New Push Into Real Estate with Stake in Sale-Leaseback Firm
By Peter Grant
A Goldman Sachs Group Inc. unit that buys stakes in alternative investment managers has made its latest push into the real-estate industry by investing in a firm that acquires stores, warehouses and other properties from big companies and then leases them back.
The unit, Petershill, in November purchased a minority stake in Oak Street Real Estate Capital LLC, which has raised over $4 billion since launching in 2009. Oak Street's funds have purchased hundreds of stores, warehouses and office buildings sold and leased back by companies such as Walgreens Boots Alliance Inc. and Big Lots Inc.
The size of the stake and the price paid by Goldman weren't disclosed, but the deal valued Oak Street at $2 billion, according to people familiar with the matter.
Since Petershill was founded in 2007, it has invested over $8 billion for stakes in more than 32 investment managers. Other real-estate firms in Petershill's portfolio include Westbrook Partners and Slate Asset Management.
Partnering with Goldman has a range of benefits for investment firms. Fundraising becomes easier because they have access to Goldman's global network of investors.
Goldman's contacts also may prove useful when searching for new investments. Oak Street currently limits its property purchases to the U.S. and Canada.
But with Goldman at its side, Oak Street is now considering reaching out to drugstore chains, retailers, logistics firms and other businesses globally that might be interested in sale-leasebacks, said Marc Zahr, Oak Street's co-founder and chief executive. "If you have the right partner, you can take a business like ours and turbocharge it."
Mr. Zahr estimated that investment-grade businesses in the U.S. and Canada alone own commercial property worth $8.3 trillion that could be sold and leased back. Globally the figure is $24 trillion, he said.
"There's a massive opportunity to unlock value and shift real estate from the balance sheet of companies that are not in the business of owning real estate to our balance sheet," Mr. Zahr said.
Corporations have long used sale-leasebacks as a strategy for raising cash while retaining control of property they need for stores, office buildings and warehouses. Since 2014, over $6 billion in net lease real estate has been acquired per year alone by public companies tracked by Green Street, a commercial real-estate analytics firm. These companies include W.P. Carey Inc., Vereit Inc., Realty Income Corp. and National Retail Properties Inc.
Some of these companies took their lumps during the coronavirus pandemic when tenants stopped paying rent. In April, only 75% of tenants, on average, paid rent at the public companies followed by Green Street.
Many of these eventually paid what they owed but the tenants "were being a little cautious" early in the pandemic, said Spenser Allaway, a Green Street analyst. "They said, 'Hey, I want to keep my liquidity. Can you provide me a deferral to help me sleep at night for the summer?'"
Rent collections for the sector have since bounced back to over 90%, according to Green Street. Shares of the sale-leaseback real-estate investment trusts, which are about 80% invested in single-tenant stores, restaurants and other retail on average are now down 20% since the beginning of the pandemic, compared with 35% for malls and 23% for strip centers, Green Street said.
Sale-leaseback firms tend to do better than other retail because they are more convenient and cater to immediate needs. "If you're driving home from work you might want to stop at a convenience store and get something you need right now," Ms. Allaway said. "You're not going to order that on Amazon."
Oak Street's portfolio is about 35% retail, 50% industrial and 15% office. The firm also focuses on buying and leasing back property from businesses with investment-grade credit ratings. Since the pandemic started, Mr. Zahr said, Oak Street has collected 100 cents on the dollar on rents. "That's the value of having an investment-grade tenant. A default on a lease can and will affect the company's credit rating."
The U.S. stimulus worth USD1.9 Trillion has been approved by the House and waiting to be signed into law by President Biden. Target timeline to complete the signatory on the dotted line is today, 14 March 2021. That also means President Biden has to execute his pen power in order to continue the issuance of unemployment benefits to low-income Americans after the expiry date. Last week, Dow Jones market clocked the historical fresh high again on Wednesday when it closed at 32,297 points. The worries on inflation pressure as an eye-washer to long traders have become a bear-trap. Sometime back, we have mentioned in this snippet on the ironical sarcasm of inflation in U.S. economy while so many Americans are cash-strapped due to loss of jobs. Since we are expecting the U.S. stimulus to be rolled out in March, the expanse of this public fund will be able to last for estimate 5-6 months. Practically, we expect the inflation will build up at strongest level sometime in mid-April to end
Hello everyone. It’s a bit late to do analysis for trading today. Here is my analysis support and resistant guide for your. FUTU support level is 123 now. Please take note. It must close above 126, then, you can continue to hold. Otherwise, your sell some profit first. To average down your cost. Once the price breakdown 123, will look for the support at 116. If the price breakup 126 and we can continue to hold. I will give your future resistant. TESLA for short trade, it went to above 600 and drop again. It still look’s good. If not breakdown to 550 again. We still look for TESLA sideway between 550~600 for the next 3 to 5 trading days. APPLE, no matter how still at the normal price range movement. Support at 122, resistant at 128. I dont think it breakdown 120 yet. Still can hold for long term. NIO looks went to 34.9 and drop again. If it hit 32 and not breakdown, it can hold for long term. It look’s good for NIO. Dont need to worry too much. Anyway, market movement we cant predic
After the price movement and Q1 2021 Financial report, FUTU Just hit above 130 yesterday premarket. So, I provide 120 as support level. Because the prive movement, the market support level is up. Once breakdown 124, i suggest take profit first. 130 still today’s resistant. Once can stay above 130, we look for next higher resisant at 140.If the price breakdown below 120, please do not buy as low first. Next support level at 112. Good Luck.