Commercial real estate investment firm Montgomery Street Partners (MSP) announced that it has formed a new venture with a U.S.-based Fortune 500 global insurance company to invest in ground leases in the top 50 U.S. metropolitan markets.
The venture will operate under the Ground Lease REIT (GLR) banner, with Montgomery Street Partners acting as the REIT’s external manager.
The REIT intends to deploy $1 billion of gross capital over the next several years through the origination of ground leases on well-located real estate assets across all property types. GLR will also acquire existing ground leases that fit its investment criteria. The venture will target ground-up developments, re-developments, and existing cash-flowing properties.
“We believe this is an extremely compelling opportunity for investors to gain access to long-duration, inflation-protected real estate assets that are cycle tested. Equally, we believe ground leases to be an efficient and accretive financing alternative for real estate owners and developers. Ground leases have evolved to become a more acceptable and mainstream financing tool in both primary and secondary markets as real estate owners and developers gain a greater appreciation for the merits of the product,” said Murray McCabe, the Managing Partner of Montgomery Street Partners.
MSP also announced the expansion of its operations with a New York office. MSP is taking space in 315 Park Avenue South, a class A office building in the Midtown South submarket. The lease marks MSP’s first East Coast office and supports its efforts to advance GLR’s investment strategy.
Moreover, MSP has made two senior-level hires who will focus on deploying capital for GLR. Max Nipon joins as Senior Vice President from Wells Hill Partners, a premier real estate investment banking firm. Prior to Wells Hill, Mr. Nipon worked at ING REF. Max Bartmann joins as Vice President from Tribeca Investment Group, a New York-focused real estate investor and developer. Prior to Tribeca, Mr. Bartmann worked at JP Morgan.