Oak Street Real Estate Capital sold the majority interest in a 97-asset portfolio for $1.3 billion on Friday, PERE has learned.
Stonemont Financial Group, a private Atlanta-based investor, bought a 96 percent stake in the triple-net-lease portfolio. Oak Street will retain a 4 percent interest and manage the portfolio.
Oak Street started assembling the portfolio in 2015, a source with knowledge of the deal said. About 65 percent of the properties in the portfolio are office, while 25 percent are retail and 10 percent are industrial real estate.
“I believe if you structure your triple-net-lease the right way and you have a long-term lease with an investment-grade-rated tenant, with the correct entity on the hook, there is no better risk-adjusted return available in the market,” Oak Street chief executive Marc Zahr told PERE.
Most of the assets came from the firm’s third core-plus vehicle, Oak Street Real Estate Capital Fund III, a 2015-vintage that closed on $515 million, while four properties came from Fund II, a 2012-vintage, $136 million vehicle, according to PERE data. Investors in both vehicles included the Municipal Employees’ Retirement system of Michigan and MAI Capital Management.
The firm is targeting a 12 percent net internal rate of return and an 8 percent yield for the fund series.
Oak Street manages $1.54 billion in assets.