Landscape for Net-lease Investing with Gary Rozier (Blue Owl) & Jon Woloshin (UBS CIO)
Per the full note [ubs-on-air], net-lease investing structures leases so tenants bear operating expenses, contrasting with gross leases. The market is large and growing, with Blue Owl Capital's Gary Rozier emphasizing its appeal for stable cash flows in a rising-rate environment. This conversation reinforces the attractiveness of real assets amid inflation concerns, though no direct FX implications emerge given the absence of currency mentions in the source.
What the desk is arguing
Net-lease investing, as described by Gary Rozier of Blue Owl Capital in the UBS podcast, structures leases so tenants pay operating expenses (taxes, maintenance, insurance, capex, utilities), leaving the landlord with pure net rent. This contrasts with gross leases more common in real estate. The thesis positions net-lease as a resilient income stream during inflationary periods, as operators retain exposure to real asset values without operational risk.
Rozier notes the market is substantial, encompassing a wide range of property types. The desk frames this as a defensive play within real assets, particularly relevant when interest rates are elevated and traditional fixed-income yields are competing. The alternative read would be that net-lease spreads have compressed with the broader yield rally, reducing the relative value argument.
Key takeaways
01Net-lease structures transfer operating expenses to tenants, providing stable cash flows to landlords.
02Blue Owl Capital sees net-lease as attractive in inflationary and rising-rate environments.
03Market size is large and diversified across property types, offering liquidity relative to direct real estate.
04The UBS CIO strategist Jon Woloshin highlights this as a key theme for real assets allocation.
Market implications
No direct FX implications arise from this real estate-focused commentary, as no currency pairs are referenced. However, broad risk sentiment and inflation expectations may indirectly influence flows into real assets, with potential spillover to USD/JPY or EUR/USD if global growth narratives shift.
Risks to this view
The net-lease thesis relies on tenant credit quality and inflation persistence. A sharp economic downturn could pressure tenant revenues and increase vacancy risk. Additionally, if central banks pivot to aggressive rate cuts, real asset yields may become less attractive versus fixed income, undermining demand.
ubs
Hi everyone. Dan Cassidy here. Welcome back to the Talking Markets podcast series here on the UBS Market Moves podcast channel.
Today's episode will focus on real estate as we will dive into the landscape for net lease investing. And for that, we're joined today by our partners from both the UBS Chief Investment Office as well as Blue Owl Capital with me today here at the 1285 Podcast Studio in New York. At the table with me is John Wallachian, Real Estate and Lodging Equity Strategist from UBS CIO Americas.
John, great to be with you. And let me now turn it over to you to introduce our special guest today from Blue Owl Capital. Great.
Thanks so much, Dan. Really appreciate it. And we're really excited today to have Gary Rozier with us.
Gary is a Senior Managing Director at Blue Owl and a member of the Real Assets Management Team. In his role, Gary serves on the Investment Committee and is responsible for reviewing and approving real asset transactions as well as interfacing with limited partners on the investment portfolios. So we look forward to talking to Gary and getting a salt on net lease investing.
So welcome, Gary. Thanks, John. Thanks for having me.
So maybe we can start kind of high level. Let's just help our clients understand what exactly is net lease investing and what size the market. So the best way I think about net lease is it's really how you structure your lease or contract with your tenant.
And effectively, what it says is the tenant is responsible for not only operating the building, but also paying all the operating expenses. Think of real estate. The vast majority of your expenses are going to be your taxes, maintenance, insurance, capex, utilities.
The tenant is contractually obligated to pay those expenses. They then pay their rent or cash flow net of all those expenses. That's why it's called net lease.
Now contrast that with what I'll call gross lease, which is real estate people are more familiar with. Let's say you own an apartment building. Well, the owner of that apartment building is responsible for operating the building and paying all the operating expenses.
Again, in net lease, it's the opposite. The tenant operates the building and pays all those operating expenses. They then pay their rent to their landlord or owner of the asset net of all expenses.
That's the major difference. There's no difference in the type of asset that you would own. So for net lease, just like gross lease, you may own industrial assets.
You may own healthcare assets, retail assets. So it's similar in terms of the actual building. The difference is in the lease itself and the structure of that contract between the owner and the tenant.
So net lease is just you're paying rent net of all the expenses. Okay. So following on from that, so what are some of the key investor considerations in net lease investing, both opportunities and risks?
One thing that comes to mind as I was listening to you describe it is probably ensuring that the tenant can actually make all these payments because you're on the hook as the owner, wouldn't you be? That's right. That's right.
That is actually the number one consideration, certainly from our perspective at Blue Owl, is tenant credit first, right? Because that is the source of your cash. You want to make sure that the entity or company, the tenant themselves, are strong enough to be able to not only cover all the expenses, but then pay you rent net of expenses.
So we actually start all of our transactions, we're looking at any deal, focus on the tenant credit. So to me, that should be the first consideration. That's your source of cash, right?
So you want to make sure that that entity is strong enough to generate cash over a full cycle so they can then pay the expenses and then pay you the rent. So we think of it that way first. The second thing is the mission critical nature of the asset itself.
So then you think about the actual hard asset. And the way we think about that is how important is this structure, this hard asset, to the operations of that company? We want to make it really painful for you to vacate the asset and we want to make it really easy for you to pay us first.
That's the best way I can think about it. So you think of first, tenant credit, then how valuable is that asset to the operation of the company? Last is, how good is the actual hard asset if the first two things fail me?
So let's say I'm wrong about the credit of the company over time, or let's say that it's not as mission critical as I thought, or it changes over time. I want to make sure that that asset itself, the hard asset, is still good enough that I can get another tenant in the building or I can then sell it to another real estate buyer. So we think of those three pillars as the biggest considerations, the biggest risks.
And our downside protective nature is always focusing on those things and trying to limit those three things from happening. And it goes in that order. So if you were to look at our investment committee memo, it's actually structured that way.
So the first third of that memo is going to talk about the company, the tenant, their business, free cash flow generation, their moat, all the things that make them a good company. Second thing is, okay, well, what does this building mean to that company? Last is separate those first two things out.
How great is this asset and how attractive would it be for another tenant or another buyer? Right? And that's exactly how our IC memos are laid out as well.
So to me, those are the main considerations and risks for that matter within that lease. Interesting. I think two of the best pieces of investing advice in real estate I've ever gotten are number one, you make your money on the buy, i.e. what your basis is.
But the other one was what – it's the optionality on the property, which when I first heard it, I had to think about it. But I thought it was really, really interesting and it kind of goes to point number three on your IC memos, which is alternate uses. So when you're thinking about or anybody is thinking about investing in a triple net lease asset, how important is it to think about that optionality?
Extremely. Extremely. Because again, you have to make the assumption even though you hope you've done your work well, sorry, on the tenant, right?
And they don't default over time and they just stay in the asset, right? You hope that you've assessed the mission critical nature. But again, we're humans.
Things happen to companies over time. So you want to make sure that the building – and I always say the building to me within that lease is your collateral, right? So you want to make sure that when you leave that collateral, it's really good collateral.
One of the things to assess there to your point is if the tenant that's in this building is not in the building, how valuable would it be to another tenant? The other thing is, well, how liquid is the asset? When I say liquid, can I move it?
Can I repurpose it, right, to make it more attractive for whatever uses are? This all goes into our hard asset underwriting, right? So even if I have a building that is let's say somewhat specialized for a particular tenant, right?
So we have a tenant that's an auto parts manufacturer, right? So like those assets are pretty specific to that business and they're auto parts. But we've already also assessed, OK, if they're not in the building, what other auto parts manufacturers would find this asset attractive or what other adjacent companies would find this attractive?
Can they take it as is? If they couldn't, how much work would it be for us to transform it in a way that makes it attractive to them, you know? So you're exactly right.
The other thing you're right about, John, what you nailed is making your money on the buy. That is so true in that lease because your income is contractual in nature, right? So you have to get all of that right up front because your income and your rent growth is all contractual, right?
So like you've got to get everything right on the front end, right? I'm not operating the building which means I'm not adding value to it like all that capex is done by the tenant, right? So there's no like true value add.
So it's all cash flow, right? So you're exactly right. You want to make sure you structure that in a way where A, your cash flow is solid, so is your rent growth.
Because after that, the only thing you need to happen is for the tenant to stay alive, right? So again, a lot of it on the buy. But like I said, you have to make the assumption in every deal that you might be wrong about that.
And if I am, how good is this hard asset? So those are the things that we think about in terms of the hard asset itself. Great.
And that sort of dovetails really into the next question which is – it's kind of a three-parter. What type of properties are best suited for a triple net lease structure? Are there any that you would shy away from?
And data centers have become obviously the hottest thing on the planet. Do data centers make sense for a triple net lease investor? Yeah.
So excellent question. Let me go back to something that I said. I'm going to highlight it one more time.
What we look for within net lease investing in the hard asset itself is mission critical, right? Well, mission critical assets do guide you to certain sectors and they guide you away from other sectors, right? So when you think about an asset that is really important to a company, it is often an industrial asset.
For example, I talked about the auto parts manufacturer, right? Well, they clearly need that asset because that's where they make their product, right? So really important.
So you tend to guide to those areas. You tend to guide towards what I call the essential of the essential retail, right? Not all retail, essential retail, right?
So think of pharmacy, grocery, gas and convenience locations. These are things that we all need to buy all the way through a market cycle. You don't put off buying gas.
You don't put off buying groceries, right? And usually they need to be close to where you are, right? Which makes them very mission critical assets, right?
So we've historically been in those two sectors. Those have been our two biggest sectors, you know, 17 years. Beyond that, you can find mission critical assets in places like healthcare, right?
That's a place that, you know, we're very active today. I don't know an asset more mission critical than a hospital. I say this all the time, right?
It's one of those things like everyone knows where it is. You need it, you really need it. And it needs to be close to you, right?
So mission critical, right? So it guides you to areas like that. It also guides you away from certain sectors.
So we've historically had a low allocation to office, right? And that's, this is pre-COVID. It's not when everybody got religion on, on office.
And again, the reason is not because I don't like an office asset. I actually love office assets and they're beautiful, but it's easy to move, right? It's not that mission critical, except for single tenant office headquarters, right?
So usually when we do office, it's single tenant headquarters, because you usually don't move your headquarters that often, but like suburban office, like it's easy to move. That's not as mission critical, right? So while we sort of move away from it, I would even say some areas of hospitality, I'd make that same argument, you know, super cyclical, you know, it's like, I want stability.
Data centers is interesting because that is the, by far and away, you know, the largest growing asset class that we see, not just in our portfolios, but certainly in many of our peer portfolios as well. And I can make a really strong argument. The data centers have become extremely mission critical.
And I'll give you a couple of examples. People still think of AI, like, you know, let's just ask chat GPT a question, right? In one day, I'm driving my kids to school, right?
My car has AI in the braking system, right? I'm taking my kids to school. 75% of their subjects, they use AI. Same day, my mother's getting a knee replacement.
Her surgeon used AI, right? So it's not just chat GPT, it's connected in everything we do. That's actually the smallest part of data center growth.
The biggest part is still compute, right? That's us taking selfies, right? That's us saving things in our computer.
Like those are still the biggest part of data center. So unless you think we're not going to demand more compute, we're not going to demand more AI, I would say, fine, it's not a mission critical asset, but we know where that's going. I mean, the growth there is explosive, you know, so you need a physical asset in order to house that data, right?
So to me, that is highly mission critical. Had a joke with my oldest son, who's a complete tech expert. He kept saying, Dad, I don't know why you guys are buying these data centers.
Everything's in the cloud. And my son, actually, the cloud is in a building that we own. It's in the data center.
It's in the data center. That's right. So that's why we're actually buying it.
But anyway, my point is, that's why it's become a growing asset class in terms of mission critical nature. And it's very well suited for NetLease because the owners, or sorry, not the owners, the users of these assets, hyperscale companies, right? Amazon, Meta, Google, Microsoft, they want to be in these assets for a long time.
Like they want long duration contracts. Like they want to make sure that they're not going to get kicked out of this data center that houses this precious information where they generate all of their revenue. They want to make sure they can be in it for a long time.
So it's perfectly suited for NetLease. So that's why it's become a larger part of our portfolio, but like many of our peer portfolios as well. And I can rep to you the mission critical nature of those assets.
Okay. So now that you've got everybody all excited about NetLease investing, I think the next question logically follows. I look at a ton of deals for our clients and I see a lot of triple NetLease assets as direct investments.
So my question to you is, what are the considerations that individuals should think about in terms of NetLease investing direct versus a fund versus a publicly traded REIT? Yeah. I mean, I think whether you invest in NetLease directly or through a GP or a manager, I think the considerations are the same, right?
The considerations are, I'm assuming that you want long, stable, predictable cashflow, right? Because that's exactly what NetLease does. You get a great tenant inside a building, you're in a 15, 16 year contract with rent growth, it's all contractual.
Like it's steady yield. It's also highly tax efficient because we're structured as REITs and there are certain benefits that REITs are afforded that we can pass along to investors in those assets that allow you to defer some of the taxes right to some point to the future. So again, whether you're investing directly yourself, again, I would say the risks are the same things we already discussed.
A, what are you paying for it? How important is the asset to the tenant? And how strong is the tenant inside the building?
Like those considerations are the same for all of us, whether you're investing in NetLease directly and there's plenty of investors that do, or through a GP like us, like the considerations are the same. A little bit different than public REITs, right? And there's certainly a place for public REITs in portfolios.
Obviously, I'm biased, managing a private REIT. And again, what I love the most there is that the value of the asset to me tends to be a little more exaggerated in private because there's less sentiment. We don't trade every day.
So we can hold assets and see the fulfillment of the asset itself. And to me, I just like the stability of it versus having to deal with public sentiment, public flows. Again, I'm not saying that that's a negative thing.
It's just a risk profile that I don't particularly want for our investors. So I think there's a place for both, but there's some great benefits to private. But again, your considerations in NetLease, like I said, whether it's direct or with a GP are the same.
It's cash flow, predictable, tax efficiency. Those are the reasons why you do it. Got it.
So early, you talked about one of the appeals to NetLease investing is virtually all the expenses fall to the tenant. And we talked about contractual terms and whatnot. But one of the things I hear from our clients when they say, and this is great, it's a credit tenant and I've got a 30-year lease.
And often I'll look at these and they're rolling five-year options. So I have a couple of questions beyond that because I think it's important people really understand what they invest in and what they own. What are some of the really detailed lease and contractual terms they should be considering, number one?
And number two, especially when I see something that is a national name, how do you think about a corporate credit versus a franchisee credit? Yeah, great question. So I love as you asked a consideration question because you're right, not all NetLease is built the same.
Oftentimes you'll hear it's a 20-year lease, but it's basically five, four years. That means the tenant has an out after every four years. We will not touch a contract like that.
So for us, unless there's some guaranteed residual value on one of the outs, but again, we usually just don't do them at all. Our perspective is to be able to go to a client and say, this is going to be your cashflow from this transaction. I've got to know that that's pretty ironclad.
And I can live with the fact that if that tenant defaults, it might be a disruption in your cashflow, but not because I didn't cross a T or dot an I on the lease. The other thing is we usually add extensions beyond that. So your initial term may be 15 years, but oftentimes our leases will have five, five-year extensions.
So tenants love that because not only are you in it for 15 years, you're actually going to stay in it for 40 years. When you think about it from that perspective, the tenant loves that because they want to know they can be in the asset. Remember, it's mission critical to them.
Last thing they want is to be kicking them out. Those are things you consider as well. There's other things in the lease that we call lease enhancements that we always try to push for that add just more downside protection for our investors.
I'll give you an example of one of those. We may have a consideration in a lease that says your investment grade today, if you drop below investment grade, you have to forward two months of rent in a separate account that we get to control. We may have that downside.
Interesting. It's great. We like that because obviously if your credit profile deteriorates, that means your ability to pay us has also deteriorated.
It doesn't mean that you stop paying us. It just means that your ability to do it is not as good as it was. Well, to have two years of rent in a separate account, that effectively makes you a double-A credit for 24 months.
That's how we look at it. So we'll put in things like that or master leases. So when we buy a portfolio of, let's say, 711s, we may buy 100.
We'll put a master lease on that, which means if you default on one, it means you default on all of them. It means the likelihood that you default on that first one is not that high because you don't want to deal with defaulting on all the assets. So we'll try to build additional downside into these leases.
Now, again, if you're a retail investor where you're buying one asset, you're probably not going to be able to get some of these terms. But again, at our size and most of our transactions, we're going direct to the corporate themselves and we're negotiating with them off-market. We can negotiate for some of these things on your behalf.
In terms of the franchisee credit versus the corporate credit, our perspective is simple. I want the best credit on the hook. That means if, let's say, John, you're a franchisee of a retailer, for example, the way we'll structure that lease is you might be the tenant, but that lease is guaranteed by corporate.
So it's always the highest credit that goes on the lease. So I'm sure you're a great credit, but I'd much rather have a large corporation on the hook versus the franchisee. So again, we'll do it, but we want to get a corporate guarantee.
We want the highest credit on the hook at all times. And that's a really, really important thing for us. Just follow up on that.
In the event that it winds up being a franchisee credit, will you ask for a personal guarantee as well? Yes. Anything that'll get us comfortable.
We've done things like that. Again, maybe it's, I don't know, 12 months of rent up front. But that is an outlier for us.
That's an aberration. Usually it's direct to corporate. They're guaranteeing it.
But there are situations where you might have a subsidiary, for example, where they actually may be the tenant. And maybe we can't get a corporate guarantee on that. We may ask for a personal guarantee.
We may ask for some other level of downside that gives us comfort. But like I said, that's pretty rare. It's a level of risk, again, that in most situations where we're just not willing to take for our LPs, I'd rather just get a corporate guarantee.
Got it. So after bottoming it, I guess about $397, $398, we've seen upward pressure on the tenure. And it appears, and obviously the world can change, that we're going to be in a potentially higher for longer environment.
So given that net lease investing is very much a spread business, how do you think about investing in a higher for longer environment? You know, it's funny. Rates, I learned a long time ago, number one, never pontificate on rates.
But what I'll tell you is how it affects net leases. It is less sensitive to rate movements, certainly in the short term, which I love about net lease. So when you go through these kind of unpredictable, violent swings within interest rates, it doesn't affect you in the short term in net lease in most cases, because again, remember your income is contractual.
We use fixed rate financing, right? So that doesn't affect our debt either, right? So our cost of capital is usually fixed for call it five years.
And then your rent growth is also fixed. So where the tenure is doesn't necessarily affect you quite as much, right? Because the value of net lease portfolios, like any other valuation, they're going to look at multiple metrics.
But the most important metric is credit quality of the tenant and cashflow, right? Well, those two things are pretty stable in net lease, right? Not necessarily value of the asset.
They'll look at those things. But like I said, because things are so stable in net lease, you're just not as susceptible in the short term. Now, real estate will always be affected by rates in some way, right?
So naturally, as rates increase, the value of your current portfolio will come down, right? Because the yield you're getting out of that portfolio is now worthless and vice versa, right? As rates come down, value of that current portfolio.
But what I always say is the way we source our transaction, again, we're more of a corporate finance partner to these companies than a real estate buyer. Like we're going direct to them. They have a need for capital.
We help them finance that need for capital, right? Whatever it might be. Higher for longer is good for us in this way.
When rates are higher, what I know is when we talk to our corporate partners, their other options to acquire capital don't look as good, right? Meaning like your cash worth less, you probably want to preserve it. Your credit facility is probably more expensive.
It's probably more expensive to issue bonds, right? Well, that allows us to come in and say, well, okay, we understand that. But you're sitting on an asset that is non-earning for you.
You're not really getting a lot of credit and it's actually tying up capital. We can unlock that capital for you by buying the real estate and leasing it back to you, right? And the beauty is when rates are higher, I can do that at a higher cap rate or a higher unlevered yield is a better way to think about that.
So I may be one of the only real estate managers you'll talk to that kind of likes higher rates because it makes that conversation with corporate is much easier, right? Conversely, you go back to, I don't know, 2019 or 2020 when the rates were at zero. It's hard to go in and talk to a CFO of a company and say, hey, I want to do a sell lease back at a seven cap, right?
Their first reaction is, well, I can borrow for nothing. My credit facility is really cheap. I can issue bonds for really cheap.
No, I'm not going to sell my real estate at a seven cap, much harder. So there is a benefit to hire for longer. You can acquire assets at a higher unlevered yield.
So to me, I kind of don't mind. When we're deploying capital, I like when rates are higher. Once it's deployed, obviously I want rates to go down, right?
So there is a benefit is my point. We're getting a lot of traditional real estate, gross lease real estate, higher rates. It's a stress on you on both sides.
We're getting at least it's actually a benefit on the buy. So it's only been a few months since we've seen this upward pressure on rates. Have you seen a concomitant move in cap rates?
So the interesting thing is we're in a short answer is no. I'm explaining why. It's interesting because we haven't seen cap rates adjust just yet.
Cap rates have actually been fairly stable for the last like six quarters. So as rates have moved, I mean, there was first a downward move in rates. Cap rates didn't move much.
Now you're seeing a slight upward move in rates. Cap rates haven't moved much. That's actually pretty nice though because when you have cap rates stable but rates come down, great opportunity for us, right?
Because we can lower our cost of capital. But we're still buying at a nice unlevered yield. They will catch up at some point in time.
There's a misnomer. We actually did a white paper on this years ago. The cap rates and interest rates move together.
And what I would say is they kind of rhyme, but they're not always in sync. This is one of those periods where they're actually not necessarily in sync. They're just not moving quite as violently as rates are in the short term.
Again, they usually will catch up to each other. But we're in this unique period where cap rates have been pretty stable now for about a year and a half. They just haven't moved for about six quarters.
But you've seen movements in rates. And like I said, we try to take advantage of that on both sides when you have that dislocation. But they'll eventually catch up to each other.
Okay, great. Before I ask you this next question, I'm required to say that UBS does not dispense tax advice and clients are encouraged to consult their own tax advisors. So was there anything in the one big beautiful bill that you think would be an incremental positive for net lease investing?
So the short answer is not really. There were a couple things that were proposed that could have affected, you know, tax law changes. It could have affected, which is important for us is there's also a tax advantage to corporations when they lease real estate versus owning real estate, right?
So you're limited in how much of your interest you can deduct as a corporation on real estate that you own. Real estate that you lease, fully deductible, right? So you can actually lower your tax burden as a corporation just by selling your real estate and leasing it, right?
So there were some proposals in there that could have been changes to those tax laws. But again, none of them really came into play. So the short of it is like pretty neutral to us is how I think about it.
But there were a lot of discussions on some things that could have, you know, affected individual tax, but also how corporations are taxed. And that's actually, again, a great benefit to us when we go to talk to corporations and we're having discussions about how they can lower their cost of capital, how they can, whatever it may be, knowing when we do a sell lease back, you know, that can be a benefit from a tax perspective to a corporation. It was important that that wasn't taken away.
You know, so anyway, like I said, it was pretty neutral to us, but there were a couple of proposals that could have changed how we do business. Great. So, you know, clients have a lot of options to invest real estate wise, you know, and triple net lease investing is, is but one of them.
What are the considerations that clients should have? You know, they say, well, geez, I can buy an apartment building. I can do single family homes along those lines.
So what are some things they should think about there? I think the biggest is, is, is sort of your risk profile and your appetite for the real estate. What I mean by that is if you are in a place where, and again, there's a lot of investors that are kind of thinking this way now because real estate is, I wouldn't say it's rebounded, but it's probably certainly hit his trough and it's working its way out where they're risk on, you know, they're looking at much more opportunistic real estate.
You know, what I'd say is that net lease is probably not for you there. You know, net lease is not necessarily set up to hit home runs, you know? So if that's what you wish for, you know, there's other types of real estate you should be looking at more opportunistic.
I think investors, when it comes to net lease, you know, the idea there is, and it's, it's non-sexy and boring, which is a compliment when people tell us that steady, predictable, tax-efficient yield, like that's why you should be in net lease. Again, I think we have a mousetrap and we've showcased this over the years with many of our vintages, and I won't get into detail on them, but, you know, where we have, in my opinion, and you can take it for what it's worth, I feel like we offer a risk profile that's more core, core plus, but, you know, some of our returns have been, you know, value-add and opportunistic. Even though we can do that, that's not the way we model transactions.
You know, we model transactions, again, for contractual cashflow with rent growth, you know, long duration. That's what investors should be thinking about. And I think the reason why you've seen such an explosion in net lease over the last several years, I mean, a lot of new entrants, a lot of new players.
We've been a beneficiary of this in growth in terms of, you know, real assets that blew out. A lot of this because I think investors have come back to a place where yield has become really important. You know, and usually I always say net lease is like the flight to quality within real estate, you know, like your blue chips or your flight to quality in equities, your investment grade bonds, or your flight to quality in fixed income.
Like we're kind of the flight to quality in real estate because, again, you just want that contractual, long duration, very clear and consistent yield that is tax efficient. To me, if that's what, you know, your risk profile is telling you to do, that's where net lease comes into play. Okay.
Sure. Yeah, Gary, this has been great. And I'm sure there are a zillion things I didn't ask you that I should have.
So I'd like to give you the last word. Anything you'd like to leave with our clients that you think would be important for them? Yeah.
So something I should have done at the beginning of the call, number one, is just to say thank you. UBS has become our biggest partner. It was our first partner globally.
It's become an extremely large partner. So I would be remiss in my position if I didn't say thank you for the partnership and everybody that has trusted us, you know, with their client's capital. So number one, I would say that.
I kind of gave you the last word in the previous question. You know, our goal is to first mitigate downside to the extent that we can, then provide clear and consistent current income. And we want to do all that without sacrificing any upside, right?
We want to hit that trifecta. That is net lease the way we do it at Blue Owl. So that's the last word.
Again, I'm so appreciative of the partnership. The time has been great. And just to be able to talk about something that obviously I live with day to day and this is near and dear to my heart has been a real pleasure.
So thank you. Well, thank you again, Gary. And it's really nice to meet a fellow geek who loves real estate.
I want to just pitch one fun fact about Gary. We were chatting beforehand. And since I'm an old guy, number one and number two, a huge NFL fan, his cousin is Mike Rozier.
And you might remember some of you out there, one of the great running backs of all time. So Gary, thanks so much. We really appreciate you.
And it was really terrific. Thanks so much. Thank you for tuning in.
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