Fundamental Income, a Phoenix-based investment firm focused on single-tenant, net-leased real estate, launched new platform, called Fundamental Income Properties, to buy and lease back single-tenant buildings.
The firm already has received a $500 million initial equity commitment from Toronto-based Brookfield Asset Management Inc. to invest directly into properties.
Alexi Panagiotakopoulos, co-founder and CIO of Fundamental Income Properties, said the two started the process of creating the platform in January. Many of the companies the firm will work with are dependent on banks for funding, so the platform will give another option for a capital partner.
Chris Burbach, co-founder and CEO of Fundamental Income Properties, said while the firm always planned to create a private investment platform, many companies that occupy this type of building have been significantly impacted by the novel coronavirus. Tenants in these buildings, which can range from day care centers to gyms, restaurants, stores and auto repair shops, are facing acute short-term financial issues. Burbach said he sees the investment platform as a way to unlock capital for businesses or provide funding for businesses that want to expand.
“We want to make sure these companies have the capital they need to keep going,” Burbach said.
The firm, founded in 2019, launched the platform April 22, and is looking at properties to buy, Burbach said. They will start buying in the next few months, and investments will include properties around the U.S. The two hope to construct a portfolio with between $1 billion and $2 billion in properties.
Fundamental Income’s first product, the Fundamental Income Net Lease Real Estate Index, tracks the publicly traded net lease real estate sector.
Fundamental Income and New York-based Exchange Traded Concepts launched the exchange-traded fund focused solely on net lease real estate investment trusts. The NETLease Corporate Real Estate ETF officially began trading on the New York Stock Exchange in March 2019 under the ticker “NETL.” It uses Fundamental Income’s index, the first to solely track net lease REITs.
An ETF is an investment fund traded on stock exchanges, similar to typical stocks. It is a collection of multiple stocks or bonds in a single fund.