REAL ESTATE NEWS

Joseph Yiu built his career on both sides of the net lease equation, buying, selling, and financing billions of dollars’ worth of single-tenant assets long before launching LNL Capital in 2023. That blend of experience, extending from first-mortgage origination to steering institutional acquisitions, helps explain why his firm has scaled quickly in a volatile capital environment. Today, LNL Capital approaches $1 billion in assets under management, focusing exclusively on debt and structured equity within the net lease sector for corporate-backed retail, industrial, and build-to-suit projects.

Early in his career, Yiu specialized in credit tenant lease and mezzanine debt structures before serving as CIO of ECM Realty Trust, which rolled several private funds into a REIT ultimately acquired by Realty Income. He later co-founded ElmTree Funds, overseeing roughly $8.7 billion in acquisitions of industrial and investment-grade properties before its sale to BlackRock.

Launching LNL signaled a return to his financing roots—this time with an explicit focus on the market gap left by banks retreating from construction and transitional lending. “I wanted to focus on where I felt the banks had orphaned, which was really the construction market,” he said. That niche, paired with his deep underwriting knowledge, has helped the firm close more than 165 net lease transactions in less than two years.

LNL Capital operates as a portfolio company of Leste Group and manages investments on behalf of insurance companies, family offices, pension funds, and other institutional investors across the U.S. and Latin America. The firm’s platform spans construction loans, bridge lending, and long-term fixed-rate mortgages for stabilized assets.

Yiu’s approach draws heavily from his own operator’s mindset. “When I structure my loan programs, I look at them from the borrower’s perspective,” he said. “If I were the borrower, would I take this loan? That’s how every product here is designed.”

He describes LNL as deliberately nimble, capable of closing deals in under a week for borrowers constrained by timing or complexity. That responsiveness has differentiated the firm from larger institutions bound by rigid credit processes. Recent financings include build-to-suit loans for veterinary and automotive operators, permanent financing on industrial facilities leased to investment-grade tenants, and bridge loans on assets transitioning into sale-leaseback strategies. With interest rates softening, Yiu expects LNL’s activity to accelerate as developers restart previously delayed pipelines.

For Yiu, the strongest opportunities today lie in two main sectors: triple-net retail and industrial. He points out that retail assets below the $8 million mark—those leased to tenants like Starbucks, Chick-fil-A, or 7-Eleven—have remained the most liquid segment of the market even amid broader transaction slowdowns. That stability has provided steady lending opportunities and reliable throughput for the firm’s deal pipeline. On the institutional side, long-leased industrial properties continue to attract both lenders and equity buyers seeking durable income streams. “As markets get murky and you hit a down cycle, only the quality assets rise to the top,” he said.

Sale-leaseback activity also represents a large and growing component of LNL’s lending book, driven by what Yiu calls a “corporate maturity wall.” Nearly $1.9 trillion in corporate debt is expected to roll over in the next two years, prompting owner-occupiers to unlock balance-sheet value through real estate. LNL is not an acquirer of those assets but a lender to private sponsors executing them. “We finance the sponsors that are doing those transactions,” he explained. “They may buy through a sale-leaseback, and we provide the first mortgage on those opportunities.”

Looking ahead, Yiu expects 2026 to mark a particularly favorable vintage for net lease investment as cap rate spreads normalize and positive leverage returns to the market. With approximately $2 trillion in commercial real estate debt maturing through 2026, he sees a sustained lending runway for LNL Capital’s fixed-rate and bridge programs. “If you study historical transaction volumes and credit spreads, 2026 will prove to be a good vintage year to invest,” he said.

Source: GlobeSt/ALM