Exchange Traded Funds (ETFs) are a popular and growing trend in the stock market and it is rare that one would be created locally by two native Arizona businessmen. The NETLease Corporate Real Estate ETF (NYSE: ARCA: NETL) was launched by New York-based Exchange Traded Concepts in conjunction with Fundamental Income, a Phoenix-based firm.
An Exchange-Traded Fund (ETF) is an investment fund traded on stock exchanges, similar to typical stocks. It is a collection of multiple stocks or bonds in a single fund. NETL is the first ETF uniquely focused solely on Net Lease Real Estate Investment Trusts (REITs), which is one of the fastest growing sectors within the REIT space. This pure-play Net Lease REIT ETF encompasses a variety of REITs that provide sustainable cash flows by leasing their properties through long-term contractual leases on a net lease basis. The leases have terms that are generally 10 years or longer, predetermined rental rate increases, and minimal landlord responsibilities.
This newly created Net Lease ETF is based on the Fundamental Income Net Lease Real Estate Index (NNNLSCTR) which is calculated by Nasdaq and aims to allow investors to benefit from these unique Net Lease REIT fundamentals. The NETLease ETF does not focus on multi-tenant malls, traditional multi-tenant office buildings and multi-family properties, all of which have significant capital expenditures and operating expense obligations.
Fundamental Income was co-founded by Chris Burbach and Alexi Panagiotakopoulos. Both businessmen are Arizona natives and graduates of Brophy College Preparatory. Burbach received his Bachelor’s degree from Santa Clara University whereas Panagiotakopoulos opted to remain in Arizona for college and received his Bachelor’s degree from Arizona State University’s W.P. Carey School of Business.
“Arizona is home to two of the top five largest public Net Lease REITs today and the birthplace of two others dating back to the 1990’s,” Burbach said. “It is fitting that a strategy firm aiming to define and help shine a light on the sector be born here as well. Many people inside and outside of Arizona aren’t familiar with what a Net Lease REIT is or why they are so special. We intend to change that and are proud to do so in our hometown.”
“Phoenix is a special town, close to our hearts, and one that has historically been overlooked by Wall Street and the financial sector as a whole,” Panagiotakopoulos said. “Chris and I were born and raised here, watched our families and friends succeed here, built our careers here and now look to grow our firm here. Phoenix is rapidly expanding on all fronts, attracting talent and business from across the country and we hope to contribute to that development with a very applicable strategy; rooted in real estate, and created to provide repeatable results.”
Founded in 2018 and headquartered in Phoenix, Fundamental Income was created to identify and create investment strategies rooted in solid, understandable fundamentals that are expected to generate sustainable income with predictable growth. The strategy was created by Fundamental Income to seek reliable and consistent performance based on a business model.
Burbach left his previous role as Executive Vice President, Underwriting at STORE Capital Corporation (NYSE: STOR), a leading Net Lease REIT, where he led the underwriting of approximately $12 billion of Net Lease investments, including over $7.5 billion in closed transactions.
Panagiotakopoulos previously served as the Managing Director, Strategic Initiatives for SMS Financial, a private distressed debt firm and joint venture partner of the FDIC. He was instrumental in the acquisition, recovery and servicing of over $940 million of commercial debt across all product types. Prior to SMS, Panagiotakopoulos specialized in credit and underwriting at STORE Capital (NYSE: STOR).