Counsel corner
The latest guest on the Net Lease Observer Podcast is Craig Ganz, Partner at national law firm Ballard Spahr. With a near 20-year career guiding single tenant net lease owners, Ganz and his team provide a range of services from transaction representation (acquisitions and dispositions) to distress and workouts. During our conversation, Craig provides insightful views on the current net lease market including transaction velocity, distress trends, and the growing role of artificial intelligence on the legal profession. Links:
Net Lease Observer | Apple Podcasts
Net Lease Observer | Podcast on Spotify
It’s always sunny in…New Mexico?
Sunland Park Racetrack and Casino, located a mile and half north of the US-Mexico border in Sunland Park, NM and 5 miles northwest of El Paso, TX, was sold in a sale/leaseback to Gaming & Leisure Properties (NASDAQ: GLPI) for $183.8 million.
Priced at an 8.2% cap rate, the deal was subsequent to Strategic Gaming Management, LLC’s acquisition of the Sunland operations and real estate for $301 million. Sunland Park opened in 1959.
According to Strategic Gaming’s press release, “Sunland Park is the leading property in the New Mexico Gaming and Racing ecosystem and offers 738 slots and 12 electronic gaming tables across 25,000 square feet of gaming space. The property includes a 1-mile Thoroughbred and Quarter Horse track with a 733-seat stadium and hosts the prestigious Sunland Park Derby. The property sits on approximately 157 acres.” Additionally, it hosts a 600-person ballroom, a simulcast wagering area, and a 78-room third-party hotel.
The acquisition adds a fourth asset to the GLPI-Strategic Gaming master lease which includes 2.0% annual rent escalators. Founded in 2009, Strategic Gaming currently operates four gaming properties in Nevada, South Dakota and New Mexico.
Sunland Park aerial view per Google Maps
Net lease owner & resi development lender
Alpine Income Property Trust (NYSE: PINE), self-described as a publicly traded real estate investment trust that owns and operates a portfolio of single tenant net leased commercial income properties, announced the origination of a first mortgage loan investment secured by a luxury residential development with over 130 lots located in the Austin, TX area.
The two-phase loan includes commitments totaling in excess of $61 million:
Phase 1: $29.5 million commitment, of which $14.1 million was funded at closing with the remainder expected to be funded in 2025
Phase 2: $31.8 million commitment, expected to be funded in 2026
The loan includes a 17.0% all-in interest rate (inclusive 4.0% paid-in-kind) with step-downs after certain dates. The 36-month loan will be repaid as collateralized home lots are sold, with such sales anticipated to begin in late 2025.
PINE management noted they “currently anticipate participating out a portion of this note to further enhance our yield.”
Always be…securitizing
Per S&P Global, both Fundamental Income and Tenet Equity appear to be in the market for Series 2025-01 asset backed securitization financings.
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