New York, United States – 07 July, 2025 – BlackRock, Inc. has announced a definitive agreement to acquire ElmTree Funds, a net-lease real estate investment firm managing $7.3 billion in assets as of March 31, 2025. The acquisition, set to close in Q3 2025 pending regulatory approvals and customary conditions, will integrate ElmTree into BlackRock’s Private Financing Solutions (PFS) platform, formed through its combination with HPS Investment Partners. The transaction includes upfront consideration primarily in stock, with potential additional payments based on ElmTree’s performance over the next five years, alongside long-term incentives to align leadership interests.
Founded in 2011, ElmTree specializes in single-tenant, build-to-suit real estate assets critical to corporate tenants, owning 122 properties across 31 U.S. states with a presence in six office locations. The acquisition enhances PFS’s ability to scale its real estate offerings, expand into new markets as an owner-operator, and deliver risk-adjusted returns and stable, long-term income solutions for clients. James Koman, CEO and Founder of ElmTree, will continue to lead ElmTree’s investment strategies post-transaction.
In an official press release, Scott Kapnick, Chairman of PFS Executive Office and CEO of HPS, stated, “Structural shifts in the real estate sector are creating new opportunities for private capital. The combination of a premier triple-net investor with our leading private financing solutions platform will position us to capture these opportunities for our clients. ElmTree has the team, expertise, and relationships that will help drive growth and deliver differentiated investment solutions, and we are thrilled to welcome Jim and his entire team.”
James Koman, CEO and Founder of ElmTree Funds, added, “The net lease market is estimated at $1 trillion, and our continued belief in the industrial build-to-suit model is rooted in the mission-critical nature of this asset class. Our specialized bricks-and-mortar expertise will be augmented by HPS’s ability to provide financing and other solutions that fuel the corporations and developers driving the economy forward. By joining HPS and BlackRock, we are better positioned to meet market demand and serve our partners by growing alongside them for the long term.”
This strategic acquisition strengthens BlackRock’s position in the net-lease real estate market, enhancing its ability to deliver innovative investment solutions and capitalize on emerging opportunities in the sector.
