Sidley Austin LLP is proud to announce its role as legal advisor to Starwood Property Trust Inc. in the company’s $2.2 billion acquisition of Fundamental Income Properties LLC, a leading net lease real estate operating platform.
Currently owned by Brookfield Asset Management, Fundamental manages a diversified portfolio of 467 properties spanning 44 states and multiple industries including food production and distribution, auto services, retail, restaurants, entertainment, and education. The platform is supported by a dedicated 28-person team with extensive expertise across originations, credit and real estate underwriting, portfolio management, and capital markets.
Under the terms of the agreement, Starwood will assume Fundamental’s existing financing facilities totaling $1.3 billion, in addition to nearly $1 billion in asset-backed security debt. The remainder of the purchase price will be funded through cash on hand, as well as debt and equity capital. The acquisition is anticipated to close later this month.
Barry Sternlicht, CEO of Starwood Property Trust, stated, “This acquisition marks the next evolution, but not the last, of our platform. The quality of the Fundamental team, their robust structuring capabilities, and deep credit focus align perfectly with our culture. While we have strong experience in the net lease sector, the scale and infrastructure of Fundamental provide us with a tremendous opportunity to significantly grow in this attractive asset class using our combined expertise.”
Chris Burbach, CEO of Fundamental Income Properties, expressed enthusiasm about the deal: “We are excited to join Starwood Property Trust and further scale our business as part of this best-in-class organization. Our team has built a proven, credit-oriented origination process, supported by long-standing industry relationships. Together with Starwood’s real estate expertise, consistent access to capital, and a growing net lease market, we are well positioned to capitalize on compelling investment opportunities.”
Sidley Austin LLP partners Michael Gordon and Joseph Michaels led the legal advisory for Starwood Property Trust in this transaction.