09/15/2022 | by Sarah Borchersen-Keto

STORE Capital Corp. (NYSE: STOR) said Sept. 15 that global institutional investor GIC and funds managed by Oak Street have agreed to acquire the net lease REIT in an all-cash transaction valued at approximately $14 billion.

STORE Capital shareholders will receive $32.25 per share in cash, a premium of 20.4% to STORE Capital’s closing stock price on Sept. 14.

Mary Fedewa, president and CEO of STORE Capital, described the transaction as an “excellent outcome” for stockholders. “This opportunity is an endorsement, by two leading real estate investors with significant access to capital, of the strength of our platform, our experienced leadership team, and our disciplined investment approach. We look forward to continuing to grow and support our customers,” she said.

Adam Gallistel, head of Americas Real Estate at GIC, said that “as one of the largest dedicated U.S. net lease real estate companies in a nearly $4 trillion market, STORE Capital is a strong addition to GIC’s diverse portfolio of U.S. real estate investments. We are confident the company will continue its trajectory of accretive growth by meeting the demand for long-term financing solutions from middle market U.S. companies.”

Market watchers responded positively to the news. David Auerbach, managing director at Armada ETF Advisors, said the transaction “highlights the demand for net lease properties as investors seek yield in the REIT space.” He added that with so many net lease players, he would not have expected STORE Capital to be the first one acquired. He went on to say that the move is significant since STORE Capital is an S&P MidCap 400 constituent, and the deal follows on the heels of the Realty Income Corp. (NYSE: O) merger with VEREIT, Inc. last November.

“In the normally staid net lease real estate world, this is a monster transaction that, if consummated, will result in the take-private of the third largest publicly traded net lease REIT,” said Scott Merkle, managing partner for SLB Capital Advisors. “GIC and Oak Street are acquiring one of the most prolific sale leaseback investors that regularly deploys well north of $1 billion a year.”

The transaction is expected to close in the first quarter of 2023; the merger agreement includes a 30-day go-shop period that will expire on Oct. 15.