BlackRock, Inc. (NYSE: BLK) announced today that it has entered into a definitive agreement to acquire ElmTree Funds (“ElmTree”), a net-lease real estate investment firm with $7.3 billion in total assets under management as of March 31, 2025. Upfront consideration will be paid primarily in stock, with the potential for additional consideration subject to ElmTree performance over the next five years. Additional financial details were not disclosed.

Founded in 2011, ElmTree is a recognized leader in the commercial net-lease sector, with a focus on single tenant, build-to-suit real estate assets that are mission critical to corporate tenants’ core operations and growth. ElmTree is a best-in-class owner-operator, with significant corporate and developer relationships and a broad geographic footprint, including six office locations and investments in 122 properties across 31 U.S. states.

Upon closing, ElmTree will be integrated into Private Financing Solutions (“PFS”), the new platform created through BlackRock’s combination with HPS Investment Partners, a part of BlackRock (“HPS”).

The combination with ElmTree will position PFS to scale its real estate offering, while expanding into new markets as an owner-operator. As part of PFS, ElmTree will help accelerate the long-term growth of the platform, combining its deep expertise and strong relationships in commercial real estate with HPS’s market expertise and existing capabilities as a leading credit investor. Together, the platform will be positioned to deliver attractive risk-adjusted returns with favorable structures, offering clients the long-term, stable income investment solutions they seek for their portfolios, while meeting the operational needs of investment-grade companies that drive the economy.

Scott Kapnick, Chairman of PFS Executive Office and CEO of HPS, said, “Structural shifts in the real estate sector are creating new opportunities for private capital. The combination of a premier triple-net investor with our leading private financing solutions platform will position us to capture these opportunities for our clients. ElmTree has the team, expertise, and relationships that will help drive growth and deliver differentiated investment solutions, and we are thrilled to welcome Jim and his entire team.”

ElmTree CEO and Founder James Koman said, “The net lease market is estimated at $1 trillion, and our continued belief in the industrial build-to-suit model is rooted in the mission-critical nature of this asset class. Our specialized bricks-and-mortar expertise will be augmented by HPS’s ability to provide financing and other solutions that fuel the corporations and developers driving the economy forward. By joining HPS and BlackRock, we are better positioned to meet market demand and serve our partners by growing alongside them for the long term.”

The inclusion of long-term performance incentives is designed to align the interests of BlackRock and ElmTree leadership, with Mr. Koman continuing to lead the ElmTree investment strategies. The transaction is expected to close in the third quarter of 2025 subject to regulatory approvals and customary closing conditions.

Skadden, Arps, Slate, Meagher & Flom LLP, Fried, Frank, Harris, Shriver & Jacobson LLP, and Sidley Austin LLP are acting as legal counsel to BlackRock and HPS. Goldman Sachs & Co. LLC served as financial advisor to HPS. Berkshire Global Advisors served as financial advisor and Kirkland & Ellis LLP acted as legal counsel to ElmTree Funds.

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate.

About ElmTree Funds

ElmTree Funds, LLC, headquartered in St. Louis, Missouri, is a real estate private equity firm that manages capital on behalf of institutional and private investors. ElmTree’s investment philosophy focuses on making strategic investments in the commercial real estate net-lease and build-to-suit sectors with a focus on industrial properties. Since its founding in 2011, ElmTree has acquired, developed, or financed an extensive portfolio of commercial real estate. ElmTree targets investments in primary and secondary markets across the U.S. that are net-leased to investment grade tenants on a long-term basis. To learn more, visit https://elmtreefunds.com/.

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