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Generation Income Properties Inc., the nascent Tampa-based real estate investment trust that specializes in acquiring net-lease properties, has picked up a potentially powerful financial partner as it prepares for listing later this year.
Oak Street Real Estate Capital LLC, of Chicago, has agreed to provide the REIT $15 million in preferred equity capital that will become part of a joint venture being formed to buy properties.
The financing will stem from a $1.25 billion fund Oak Street finalized last September.
David Sobelman, GIP's founder and president, says the two firms are forming a joint venture so as not to dilute the REIT's common shares.
“We're told they understand what we're trying to build, and they want to grow the relationship with us,” Sobelman says of Oak Street, which was founded in 2009 by Marc Zahr.
“It's really flattering for us because big institutions, like Oak Street, tend to gravitate to, and want to work with, other big institutions.”
Zahr, whose firm's investors include the Teachers Retirement System of the State of Illinois and the Illinois Municipal Retirement Fund, did not return a telephone call for comment on the GIP investment.
The Oak Street partnership comes amid a flurry of activity at GIP.
Most notably, the REIT expects to list on the Over The Counter stock exchange by the end of June, a move that would allow retail investors a chance to buy shares in the company. To that end, GIP has retained Clearwater-based Island Stock Transfer to help move the company onto the OTC.
GIP currently has nearly 2 million common shares outstanding.
In advance of the listing, GIP's board has authorized a 10-cent per share cash dividend to common share holders of record on Jan. 2. The dividend, the company's first ever, is slated to be paid before the end of March.
Sobelman, who owns roughly 58% of GIP's common shares, has decided to wave his dividend payment for the quarter. That payout would be valued in excess of $100,000.
“I want people to know we're trying to grow this company,” he says.
The company also is preparing to acquire its second property, a free-standing Starbucks store recently completed in Tampa. GIP plans to close next month on the coffee shop for roughly $3.5 million, Sobelman says.
Sobelman has indicated he hopes GIP will grow to have a market capitalization of $50 million by the end of this year.
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