Blue Owl Real Assets

Our Story - Built to last

Our story begins in 2009. Against the backdrop of the global financial crisis, we set out to develop a strategy that could withstand the environment we had just found ourselves in – and that could survive through future black swan events. Little did we know that just a decade later, when a global pandemic hit, we would be ready.

So, in 2020, how did we do? Within real estate the most simplistic way to measure a manager is by asking “how much rent did they collect when the world was shut down?” We collected 100 cents on the dollar from every tenant in our portfolio on time – even though those companies seemingly had a free pass for an extended period. While that may sound hard to believe, what we knew from the outset of the strategy remains true. If you own mission critical assets leased by investment grade1 tenants, they are statistically less likely to default relative to noninvestment grade rated tenants, particularly in the worst of environments.

Over the past 15 years, we have delivered on our goal of putting forth a strategy that can pay predictable income through varying market cycles.

Relentless Focus

We focus on a net lease investment strategy structurally targeted to pay a seven to eight percent cash yield annually, net of fees.

What does that mean? Net lease is a structure whereby the tenant is contractually responsible for all the property operating and capital expenditures, and the landlord, (Blue Owl), receives rent, net of all expenses.

Now combine this specific net lease structuring with our Blue Owl DNA: an unrelenting focus on credit quality, and we believe we are delivering a strategy that can help place investors in a strong position for success. Layer on top of this our singular focus on the most mission critical assets in a company’s portfolio, and we believe the durability of the income is amongst some of the most attractive.

So, let us take a step back. We have mission critical properties leased to investment grade rated tenants, net lease structures, and long duration leases, usually 15 years or more. In addition, Blue Owl has established and mandated a hard minimum on the cap rates with which we will buy assets, and that discipline has afforded us a margin of safety that we believe has served our investors well.

Because at Blue Owl we are relentlessly focused on these attributes, the net lease strategy can withstand market distress, while seeking to pay a predictable income stream. Our focus allows us to be discerning with the assets we acquire and the tenants we partner with, ultimately allowing us to determine where we can best create alpha. 
 

1 Investment grade companies must have “BBB-” rating or higher by S&P or an equivalent rating from a nationally recognized statistical rating organization (NRSRO). Creditworthy refers to businesses that Blue Owl deems financially sound enough to justify an extension of credit or engage in a lease agreement.