SLB Capital Advisors, a real estate advisory firm focused on executing sale leasebacks for corporations and sponsors, arranged four leasing transactions on behalf of EVgo, a leader in electric vehicle charging solutions, by Q1 2024.
SLB worked on behalf of EVgo to identify and source an institutional investor to fund cornerstone properties for EVgo’s hubs business. The properties are located in Los Angeles, CA, Santa Monica, CA, San Diego, CA and Brooklyn, NY and are expected to feature fast charging stalls owned and operated by EVgo. The total property value of the transactions was approximately $27 million.
Upon sale of certain properties to an institutional investor, EVgo simultaneously leased back the properties under a long-term lease with multiple renewal options.
Malik Franklin, a partner with SLB Capital Advisors, and the principal architect of the transaction, said the deal is noteworthy for investors because the underlying real estate housing the charging stations represents an emergent source of exposure to renewable assets for both traditional sale leaseback investors and the growing stable of infrastructure investors. “Charging stations often occupy desirable, urban locations, and once established, can generate the stable cashflows that support institutional ownership of the underlying assets.”
He added that current cap rates make sale leasebacks an important source of both growth and permanent capital. “In the current interest rate environment, sale leaseback financing offers an attractive source of financing as its cost can be well inside of other forms of financing. Coupled with the fact that the sale leaseback as a financing tool allowed us to creatively address special considerations such as development and entitlement risk, credit risk, and end-user risk, we expect to see sale leasebacks used more broadly as a financing tool in the EV and other ESG-related industries, such as green recycling and renewable energy production.”
Commenting on the transactions, Badar Khan, chief executive officer of EVgo said sale leasebacks offer another tool in EVgo’s kit for funding the company’s growth. “The sale leaseback model is a highly effective capital structure that allows EVgo to maintain a nimble position in the market, enabling us to focus on what matters most: installing more fast chargers for our customers. With well over a decade of experience in deploying fast charging infrastructure, EVgo continues to innovate as we deliver a customer-centric fast charging network designed to serve all EV drivers.”
Scott Merkle, managing partner of SLB Capital Advisors, added “Our exclusive focus on sale leasebacks, ability to find the optimal investor, and consideration of creative approaches to address the specialized funding requirements in the EV space, helped us to deliver to EVgo a blueprint for these types of transactions in the future.”
About SLB Capital Advisors LLC
SLB Capital Advisors is a real estate advisory firm focused on sale leasebacks and M&A-related real estate transactions. SLB Capital Advisors, comprised of a team with decades of investment banking and capital raising experience, leverages its expertise in sale leasebacks and corporate finance to help corporations and private equity groups recognize value arbitrage opportunities, enhance returns and strengthen balance sheets. SLB Capital Advisors is headquartered in New York City. Learn more about SLB Capital Advisors by visiting www.slbcapitaladvisors.com.
About EVgo
EVgo (Nasdaq: EVGO) is a leader in charging solutions, building and operating the infrastructure and tools needed to expedite the mass adoption of electric vehicles for individual drivers, rideshare and commercial fleets, and businesses. EVgo is one of the nation’s largest public fast charging providers, featuring over 950 fast charging locations across more than 35 states, including stations built through EVgo eXtend™, its white label service offering. EVgo is accelerating transportation electrification through partnerships with automakers, fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, and gas stations, policy leaders, and other organizations. With a rapidly growing network and unique service offerings for drivers and partners including EVgo Optima™, EVgo Inside™, EVgo Rewards™, and Autocharge+, EVgo enables a world-class charging experience where drivers live, work, travel and play.
