Goldman Sachs has agreed to buy LCN Capital Partners for up to $410 million, adding about $3 billion in commercial real estate assets to its investment management business.
Summary
- Goldman will pay $260 million upfront, with up to $150 million tied to future targets.
- About 80% of the acquisition price will be paid in Goldman Sachs stock.
- LCN manages sale-leaseback, build-to-suit, and triple-net lease investments across North America and Europe.
- The transaction is expected to close by the end of 2026, subject to regulatory approval.
Goldman Sachs said in an Aug. 18 announcement that the transaction will bring LCN’s investment funds, corporate relationships, and real estate team into Goldman Sachs Asset Management.
Goldman Sachs will pay most of the LCN price in stock
Under the agreement, Goldman will provide about $260 million when the acquisition closes. LCN’s owners could receive another $150 million through deferred and conditional payments if the business meets long-dated performance targets and service commitments.
Approximately 80% of the full consideration will consist of Goldman stock, according to the bank. The final amount could therefore remain below $410 million if the conditions governing the additional payment are not met.
Expected to close by the end of 2026, the acquisition still requires regulatory clearance and must meet customary closing conditions. Goldman’s Global Banking and Markets division acted as the bank’s financial adviser, while Wachtell, Lipton, Rosen & Katz and DLA Piper provided legal advice.
RBC Capital Markets advised LCN on the sale. McDermott Will & Schulte served as the real estate manager’s legal counsel.
Based in New York, LCN was founded in 2011 by Edward V. LaPuma and Bryan York Colwell. Its investment team has more than 30 years of experience in triple-net lease transactions, according to Goldman.
LaPuma, Colwell, and other LCN employees will join the real estate division within Goldman Sachs Asset Management after the purchase closes. The bank did not disclose whether LCN’s brand will remain in use or provide details about possible changes to its investment funds.
“Our team, our strategy, and our commitment to our partners, both capital and corporate, remain unchanged — what changes is the scale of our ambition,” LaPuma said.
LCN adds $3 billion in commercial property assets
LCN had approximately $3 billion in assets under supervision as of June 30, with much of its capital supplied by institutions, insurance companies, and wealthy individuals. The firm operates in North America and Europe and has raised 10 investment funds since its creation.
Its portfolio covers industrial sites, offices, retail properties, and buildings created for specific corporate uses. LCN originates, negotiates, and manages sale-leaseback, build-to-suit, and net lease transactions, combining property ownership with an assessment of each tenant’s credit.
In a sale-leaseback, a company sells a building to an investor and immediately rents it under a long-term agreement. The company continues operating from the property while gaining access to cash that was previously tied up in the building.
Triple-net leases place several property expenses on the tenant. Along with rent, the tenant generally pays real estate taxes, insurance, and maintenance costs, reducing some operating expenses for the property owner.
Build-to-suit agreements involve constructing or adapting a building for a particular tenant, usually under a lease negotiated before the work is completed. Such contracts can give investors a known occupant and rental arrangement, although returns still depend on the tenant’s ability to meet its obligations.
Goldman said LCN’s strategy has produced an average annual net cash-on-cash return of 10.8% since inception across fully invested flagship funds. LCN calculated the figure as of March 31, using dollar-denominated returns for its North American funds and euro-denominated returns for its European products.
According to the bank, LCN’s funds have also ranked in the first or second quartile among closed-end real estate funds when measured by net multiple on invested capital and distributions to paid-in capital. Past fund performance does not guarantee comparable returns after the business joins Goldman.
The deal expands Goldman’s private real estate operation
Goldman oversees more than $4 trillion in assets across its investment businesses, based on figures reported as of June 30. Its alternatives division accounts for over $706 billion, covering private equity, credit, infrastructure, venture capital, real estate, and hedge fund strategies.
Within real estate, the bank said it has invested more than $65 billion since 2012. Its existing operation covers property equity, senior mortgages, mezzanine debt, and investments ranging from individual buildings to large portfolios.
LCN gives the division a dedicated sale-leaseback and triple-net lease platform. Goldman estimates that companies hold approximately $14 trillion of property on their balance sheets across North America and Europe, while only a small portion changes hands through net lease transactions each year.
American companies can use sale-leasebacks to obtain capital without leaving facilities needed for daily operations. For U.S. institutional investors, LCN’s funds offer exposure to rental income and corporate credit through private products rather than publicly traded real estate investment trusts.
David Solomon, Goldman’s chairman and chief executive, said LCN would offer asset and wealth management clients “diversified sources of returns” while providing corporate clients with additional financing choices.
“Their focus complements our private real estate team’s broad 30-year track record and will expand our ability to serve our insurance, institutional, and wealth client segments,” Solomon said.
Goldman expects its corporate relationships and Global Banking and Markets network to support LCN’s work with companies and developers. Its asset management distribution channels will also place the funds before pension plans, insurers, family offices, and wealthy clients.
In June, Goldman also entered blockchain-based real estate products through a tokenized property fund developed with Apex Group, Archax, Ownera, and LRC Group. Crypto.news reported that the fund represents real estate interests through Goldman’s GS DAP platform while retaining conventional administration, custody, and regulatory controls.
LCN follows Goldman’s $2.25 billion NEOS purchase
Six days before announcing the LCN agreement, Goldman disclosed a deal to acquire NEOS Investments for as much as $2.25 billion. NEOS managed about $30 billion across 19 options-based income ETFs as of June 30.
As previously covered in August, the NEOS purchase is expected to increase Goldman’s ETF assets beyond $130 billion, including about $80 billion held in actively managed products. NEOS co-founders Troy Cates and Garrett Paolella will become Goldman partners after that transaction closes.
NEOS also manages three U.S.-listed income ETFs connected to Bitcoin and Ethereum, giving the bank exposure to another area of investment management. The NEOS Bitcoin High Income ETF, Boosted Bitcoin High Income ETF, and Ethereum High Income ETF collectively held more than $1.1 billion when the acquisition was announced.
Unlike the LCN purchase, the NEOS transaction is scheduled to close during the first quarter of 2027. Its completion also depends on regulatory approval and customary closing requirements.
Goldman shares traded at approximately $1,029.55 on Tuesday, down about 2.1% from the previous close of $1,051.31. The stock moved between an intraday high of $1,052.98 and a low of $1,029.46.
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