Private REIT Now Owns 314 Properties in 33 States
ROCHESTER, N.Y. – Broadstone Net Lease (BNL), a private real estate investment trust (REIT) managed by Broadstone Real Estate, continues to grow its national portfolio of triple-net leased properties. On November 23, 2015, BNL announced the acquisition of a property tenanted by Arkansas Surgical Hospital (ASH) via an UPREIT transaction.
Located in North Little Rock, Arkansas, ASH is a short-term acute care surgical hospital that specializes in joint replacement and spinal procedures, with 18 practicing surgeons. Constructed in 2005 and expanded in 2008, the 125,909 square foot facility houses 11 operating rooms. ASH has achieved accreditation by the Accreditation Association for Hospitals and Health Systems (AAHHS). Accreditation distinguishes ASH from many other facilities by proving the hospital provides the highest quality of care to its patients as determined by an independent, external process of evaluation.
UPREIT transactions, (where “UPREIT” stands for Umbrella Partnership REIT), provide a tax deferred exit strategy for owners of real estate who would otherwise recognize a significant taxable gain in a cash sale of a highly appreciated property with a low tax basis. The facility was previously owned by a contingent of 14 practicing physicians; by contributing the ASH property into the operating partnership of Broadstone Net Lease‚ they were able to exchange low cost-basis real estate for an interest in a professionally managed portfolio that is diversified by geography, property type, tenant, and lease duration.
“We are exceptionally pleased to complete this UPREIT transaction with the physicians from Arkansas Surgical Hospital.” said Amy Tait, Chairman and CEO of Broadstone Real Estate. “UPREIT transactions are, by nature, mutually beneficial: in this case, the former property owners were able to exchange actively-managed real estate for a passive interest in a diversified, professionally managed portfolio on a tax-deferred basis, and at the same time, our private REIT acquired an attractive property and added new equity capital. This remains an excellent time to invest in triple-net leased real estate, and we look forward to completing additional acquisitions before year-end.”
The transaction closing initiated a new 15-year lease, with four 5-year renewal options, and annual rent increases of 2.5%. ASH was represented by Chris Stai of Brown Gibbons Lang & Co. Tones Vaisey PLLC represented Broadstone Net Lease.
About Broadstone Net Lease:
Broadstone Net Lease (BNL) invests in freestanding, single-tenant, triple-net leased properties located throughout the United States, primarily via sale and leaseback transactions. With a diversified portfolio of 314 medical, industrial and retail properties in 33 states, the REIT targets individual or portfolio acquisitions within the $10 to $200+ million range.
There are currently more than 1,400 shareholders in BNL, which is externally managed by Broadstone Real Estate LLC. BNL remains open for new investment by accredited investors on a monthly basis, with a minimum investment of $500,000. Shares are offered via private placement.