Derby Day
Later today is the running of the 152nd Kentucky Derby.
Given the net lease market continues to emerge as a meaningful asset class and sustained earnings growth is the litmus test of long-term success, we’re rooting for two horses:
Litmus Test (Post 4) at 35:1
Emerging Markets* (Post 15) at 11:1
*Fun fact: Emerging Markets is owned by value investing hedge fund manager Seth Klarman
Blue Owl quarterly update
As part of its corporate 1Q2026 financial reporting, Blue Owl provided a myriad of updates during its earnings call regarding its net lease investment vehicles:
-Net Lease vehicles raised ~$3 billion of equity capital during 1Q2026
-Overall net lease investment pipeline of $50 billion under LOI or contract
-Net Lease Europe: $1.25 billion in equity capital raised to date
-Net Lease Flagship Fund VI: Fully committed with 2/3 of capital called; Visibility to fully call capital by summer 2026
-Net Lease Flagship Fund VII: $5.8 billion in equity capital raised to date; Anticipate reaching the $7.5 billion hard cap by the end of 2026
-Net Lease non-traded REIT: $1.1 billion of equity inflows (over $200 million from 1031 exchange structures); $134 million of repurchases (outflows) during 1Q2026
One Million…square feet
Just one day after its 1Q2026 earnings release, LXP Industrial (NYSE: LXP) announced it pre-leased the company’s 1.2 million square foot speculative development project in the West Valley submarket of Phoenix to a U.S. subsidiary of a global logistics company as a full building user.
The lease is expected to commence on December 1, 2026, for a five-year lease term at an initial annual cash base rent of $9.8 million (~$8.25/sq. ft.) with 3.5% annual rental escalations. The estimated total cost of $122 million implies an 8.0% development cash yield and the project has a 1Q2027 estimated base building completion date.
Good as Gold(en Entertainment)
VICI Properties (NYSE: VICI) closed of the previously (November 2025) announced $1.16 billion sale/leaseback of 7 Nevada gaming properties from Golden Entertainment (NASDAQ: GDEN) as part of its take-private transaction.
The portfolio includes: The STRAT Hotel, Casino & Tower on the North Las Vegas Strip; Arizona Charlie’s Decatur and Arizona Charlie’s Boulder in the Las Vegas Locals market; Aquarius Casino Resort and Edgewater Casino Resort in Laughlin, Nevada; and Pahrump Nugget Hotel & Casino and Lakeside RV Park & Casino in Pahrump, Nevada. Aggregate properties total ~362,000 square feet of casino space, over 6,000 hotel rooms, 4,306 slot machines and 78 table games.
The deal includes a 30-year master lease and was priced at a 7.5% going-in cap rate.
STORE Capital 1Q results
As of March 31, 2026, STORE held investments in 3,577 property locations with a gross investment of $17.3 billion. 1st quarter deployment (acquisitions) totaled ~$303 million while dispositions were $115 million. Portfolio stats include:
-Weighted average lease term remaining of 14.8 years
-677 tenant customers across service (61%); manufacturing (27%); and service-oriented retail (12%)
-Largest customer concentration represents 3.3% of annualized revenue
-99% of leases are triple-net
-17 vacant properties not subject to a lease
More 1Q2026 filings
Listed REITs reporting this week included a four-pack of industrial-focused groups (W.P. Carey; STAG Industrial; LXP Industrial; and Broadstone Net Lease), gaming/experiential landlord VICI Properties, and retail specialists NNN REIT and Four Corners.
The second, third, and fourth order effects of the artificial intelligence investment boom continue to reveal as both STAG and LXP noted leasing demand and execution with data center related tenants (service providers, construction companies, etc.) while Broadstone’s earning call included significant commentary around its data center-related options for the company’s Project Triboro Industrial Park investment in Olyphant, PA.
Meanwhile, activity for acquisitions/investments and leasing across all property types is accelerating with tenant credit maintaining stable performance.
Check out the full reviews here:
-Sean Hostert