UNDERWRITING PROCESSplus_icon

The core of our business is a thorough analysis of the credit of our future partner.

LONG TERM FINANCINGplus_icon

Our strategy is to invest with companies with strong growth prospects, proven business models and defendable market positionings.

OUR FOCUS

EXPERTISEPlus Icon

Our proven track record coupled with a strong reputation makes us a strong partner.

BROAD INVESTMENT SPECTRUMPlus Icon

We invest across the credit spectrum from financially stable to distressed entities.

Investment Strategy

LeadCrest’s investment objective is to build a diversified portfolio of high-yielding real estate assets, occupied by credit tenants on long-term, triple net leases.

 

Underwriting a sale-leaseback transaction is namely a credit strategy with a real estate collateral. Investment opportunities could be categorized in four segments as shown in the matrix below:

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Segment #1: Superior Credit & Non-Prime Real Estate

This is an attractive segment as it combines strong tenants with non-prime real estate assets. The assets are qualified as non-prime as they might be tenant specific or simply located in non-major real estate submarkets with lower barriers to entry.

Segment #2: Superior Credit & Prime Real Estate

This is a highly competitive segment which combines prime real estate assets and locations with typically investment grade tenants. Such assets are highlighted sought-after by both international equity investors as well as leading domestic investment firms. Their cost of capital is typically lower than private investors and does not require asset level financing.

Segment #3: Average Credit & Prime Real Estate

This is also an attractive segment as it combines prime real estate assets, but with somewhat riskier credits. The corporate users are qualified as riskier due to size, leverage or simply their years of operating history. However, the credit risk is offset by the ownership of a strong asset in a prime real estate submarket.

Segment #4: Average Credit & Non-Prime Real Estate

This segment is the riskiest part of the market as it combines both real estate and credit risks. A risky asset could be an old asset, a non-major location with low liquidity or simply a specialized, single-purposed asset. This category could offer strong yields with high initial acquisition cap rate. However, it also posts significant risk at this point of the cycle especially as European institutional investors are particularly focused on alternative users for a property and limit exit options and upside.

Investment Criteria

  • Criteria
  • Transaction Size
  • Geography
  • Property Types
  • Investment Types
  • Industries
  • Lease Length
  • Lease Type
  • Tenant Credit
  • Target
  • €10 – €50 million
  • Europe (Western and Northern Europe)
  • Sale-leaseback, build-to-suit and select net-lease
  • Office, industrial, retail and special-purpose
  • All Industries
  • 10+ years
  • Triple-net
  • Public and private, investment grade and below