Terravet Real Estate Solutions’ new Private REIT provides veterinary practice owners the opportunity to diversify their property holdings in properties predominantly rented out to veterinary offices and hospitals. Based in Bala Cynwyd, Pennsylvania, they aim to give veterinary real estate owners multiple choices in regards to retirement, leasing or selling plans for their real estate portfolios.
Real Estate Investment Trusts (REITs) have long been a go-to investment vehicle for individuals seeking exposure to single tenant, net-leased properties. More recently, however, investors are seeking direct exposure to niche asset classes such as single tenant veterinary real estate and healthcare-related properties.
Veterinary real estate investments are especially desirable to investors due to the rising demand for pet care in America. Furthermore, veterinary service providers make excellent tenants with predictable cash flows for investors looking for reliable tenants.
Demand is driving real estate acquisition opportunities. According to the National Association of Veterinary Practice Managers (NAVPM), total revenues from veterinary practices increased from $27 billion in 2000 to $59 billion by 2015. As a result, these rising revenues are fuelling an increase in capital expenditures for veterinary facilities.
Due to current market conditions, some single-property owners may be reluctant to sell their veterinary assets and diversify their portfolios quickly enough. By creating a REIT instead, these single property owners can contribute their assets tax efficiently while reaping diversification’s advantages.
Terravet Real Estate Solutions announced the formation of its first private REIT for veterinary real estate. Initially owning 20 practice buildings valued at roughly $100 million, Terravet’s REIT will gradually grow over 18 months through an umbrella partnership REIT structure with plans to acquire an array of practice and hospital properties.
REIT management team boasts extensive expertise in veterinary real estate, with expertise sourcing, investing and managing properties. Their work is supported by multiple institutional investors such as Bagnols Family Office Investment Partners as well as an initial preferred equity investment of $35 Million from Sculptor Diversified REIT, an affiliate of Sculptor Capital Management.
Terravet Real Estate Solutions REIT is poised to capitalize on the expansion of the veterinary market, targeting large general practice, specialty and emergency veterinary hospitals nationwide. For more information about their REIT contact Daniel Eisenstadt of Terravet Real Estate Solutions (daniel@terravet.com or call 610-643-6500).