Inland, Lexington Complete Seeding of Net Lease JV

Inland American Real Estate Trust Inc. and Lexington Realty Trust have closed on a final group of seed properties into the $1.1 billion joint venture they set up to acquire and manage net lease properties. The deal, according to Lexington, involved the transfer of two single-tenant net leased assets from Lexington and its subsidiaries for $64.8 million to the joint venture. The properties total about 554,500 square feet, and are both located in Texas. The JV, Net Lease Strategic Assets Fund L.P., has now all together been seeded with 43 net leased properties contributed by Lexington, totaling 6.2 million square feet valued at about $743 million. The Lexington contribution includes the assumption of about $331 million of first mortgage financing secured by certain of the assets. Under the terms of the agreement, Inland American will contribute up to $342 million, including the initial investment of about $214 million, to the venture. Inland Institutional Capital Partners Corp. negotiated on behalf of Inland American in this part of the deal, as it has previously. “Inland American, the capital partner in this case, has a number of ventures with operating partners, such as this one with Lexington, and they work well for us,” George Pandaleon, president of Inland Institutional Capital Partners, told CPN this afternoon. “The partnerships enable us to do a number of things, such as giving us access to certain types of properties and markets that would otherwise be much more difficult and time-consuming to enter.” Though completely seeded, the JV isn’t finished with property acquisitions. Inland and Lexington anticipate acquiring as much as $400 million of additional net leased assets over the next two years.