Private REIT Now Has $960 Million of Unsecured Debt Capacity
ROCHESTER, NY– Broadstone Real Estate, LLC announced that Broadstone Net Lease, Inc. (BNL) has closed on a new $375 million, delayed-draw term note that is being funded by a syndicate of eight commercial banks. The facility was initially launched at $300 million, but received commitments well in excess of that target. The company ultimately scaled back commitments to a $375 million final close. The facility closed today, November 6, 2015.
The facility’s initial draw, which took place at closing, was for $200 million, and the proceeds were used to pay down BNL’s $300 million line of credit. The remaining $175 million of capital will be used to fund future property acquisitions, and is available to be drawn for up to one year from the facility’s initial closing date. The note carries an initial term of 39 months (3.25 years) and has two, 12 month borrower extension options with a final maturity in 2021. BNL recognized pricing improvements, as this term note’s pricing is 10 – 35 bps lower (based upon the REIT’s leverage), than BNL’s existing facilities. Borrowing rates for the facility float at margin over LIBOR and range from LIBOR + 165 bps to LIBOR + 215 bps, subject to the REIT’s overall leverage ratio.
“We are very pleased with the execution of this term note.” said Chris Czarnecki, President and CFO of Broadstone Real Estate. “The additional proceeds will be utilized to help fund our acquisition pipeline into 2016, and allow BNL to be responsive to opportunities as they arise. Our management team appreciates the support of all eight lenders in the facility.”
SunTrust Robinson Humphrey (SunTrust), J.P. Morgan Securities, LLC (J.P. Morgan), and Manufacturers and Traders Trust Company (M&T) served as Joint Lead Arrangers of the transaction and collectively committed $200 million to the facility. SunTrust served as the Administrative Agent for the transaction, and J.P. Morgan and M&T served as Co-Syndication Agents. Capital One (NA), Key Bank (NA), and PNC Bank (NA) served as Documentation Agents. Additional participants in the syndication include Bank of Montreal and First Tennessee Bank. Tones Vaisey, PLLC represented Broadstone Net Lease in the transaction.
About Broadstone Net Lease:
Broadstone Net Lease (BNL) invests in freestanding, single-tenant, triple-net leased commercial properties located throughout the United States, primarily via sale and leaseback transactions. With a diversified portfolio of 313 medical, industrial and retail properties in 33 states, the REIT targets individual or portfolio acquisitions within the $5 to $200+ million range.
In addition to Broadstone’s focus on sale and leaseback transactions, the firm’s principals have executed more than $1 billion of UPREIT transactions, in multiple entities. UPREIT transactions may 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.
There are currently more than 1,350 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.