By Sam Boughedda
Investing.com — iStar Inc (NYSE:STAR), a real estate investment trust (REIT), saw its shares rise in today's session after announcing an agreement to sell its net lease business to Carlyle Group Inc's (NASDAQ:CG) global credit platform in a deal worth approximately $3 billion.
iStar rose 11.4% on the news, while Carlyle's stock price gained 2.3%.
The equity to fund the deal will come from a combination of Carlyle's Global Credit platform and a minority balance sheet investment from Carlyle.
Through the deal, Carlyle's global credit platform will gain a portfolio of triple-net leases spanning industrial, office and entertainment properties throughout the U.S.
The iStar net lease investment team that oversees the portfolio will join Carlyle's Real Estate Credit team.
Carlyle said the acquisition is part of its plan to scale its Global Credit platform, which grew to a record $66 billion in assets under management in Q3 2021.
Mark Jenkins, Head of Global Credit at Carlyle, said, “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. We set out to grow the Global Credit platform in part by expanding into adjacent, scalable areas and this is another example of how we are delivering.”
iStar's CEO, Jay Sugarman, said, "For us, this sale continues the execution of our announced corporate strategy of simplifying our portfolio and focusing on the ground lease business, which we view as the next evolutionary wave in commercial real estate."
The transaction is expected to close in the first quarter of 2022.