10. Industrial, triple-net, sale-leaseback: sexy-sounding yet steady real estate ft. Drew Wahlgren from MAGCP

Pixels & Properties

In today's episode, we discuss industrial single-tenant triple-net lease real estate acquired through a sale-leaseback: which sounds like a jumble of buzzwords but is actually a safe and steady investment strategy centered on the often invisible core of the American economy: small and mid-market companies.
Key takeaways:

• Day to day property management responsibilities are very light in industrial NNN assets, as the tenants handle all the maintenance and operations. Since these facilities manufacture the goods that drive their business, the tenants take great care of the properties
• Analyzing and mitigating credit risk of private companies is a key competitive differentiator for MAGCP
• Once the assets are acquired they generate consistent and predictable cash flow, since the tenants pay all the expenses in a net-lease, annual rent escalations are agreed to upfront, and the leases are often 20 years long
• The tenants are private mid-cap companies with 8/9-figure EBITDA and strong gross margins, boring yet profitable companies most of us have never heard of but that produce goods we all consume

About the guest: Drew Wahlgren serves as the Vice President of Capital Markets at MAGCP, where he oversees both equity and lending relationships. He joined the company in 2019 following a successful 8-year tenure as a risk analyst and program manager at Liberty Mutual Insurance. Drew holds a Bachelor of Science in Finance from California State University at Hayward. He resides in the Dallas-Fort Worth Metro area with his wife and three children, and enjoys spending quality time outdoors with his family.
About MAGCP: Founded in 2015 by Dax T.S. Mitchell and Andrew Gi, MAGCP is a private investment firm specializing in industrial real estate and small-mid cap operating companies approaching $800m in assets under management. The sale-leaseback model generates immediate cash flow while securing management-friendly long-term net leases. They've launched two funds, each deploying $60m of equity into this core strategy.
MAGCP also acquires small cap operating companies, providing further opportunities to unlock value through business professionalization and recapitalizations. To date, MAGCP Equity has acquired four companies with a combined 250 employees. In addition, MAGCP utilizes strategic partnerships and programmatic joint ventures to execute on more targeted investment strategies. To find out more, go to magcp.com

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