Broadstone Real Estate registered a new interval fund on October 13, targeting a $1 billion capital raise. According to the draft registration statement, Broadstone Real Estate Access Fund intends to invest in a portfolio of institutional quality real estate and real estate-related investments. The portfolio will include the following asset classes: (i) Direct Real Estate Investments, (ii) Private CRE Investment Funds, (iii) Publicly Traded CRE Securities, and (iv) CRE Debt Investments. The minimum initial investment is $2,500 for Class W shares and $1,000,000 for Class I shares.
Broadstone Asset Management, LLC will serve as the Adviser to the fund. The draft registration statement states that a sub-adviser will cover the publicly traded CRE portion of the portfolio. However, the filing does not specify who the sub-adviser will be.
Also, relatively rare in the 40 act fund space, Broadstone Real Estate Access Fund intends to be a REIT for Tax purposes. (One other example is Mackenzie Realty Capital, which is both a non-traded BDC and a REIT).
Fees and expenses
Class W Shares will pay to the the Distributor( ALPs) a shareholder servicing fee of 0.25%. Class I shares will not pay a shareholder distributor fee. Neither share class will be subject to an upfront sales load. Shareholders will not face a repurchase fee, as long as they have held their shares for at least 90 days. The management fee will be 1.25%.
Broadstone Real Estate
Broadstone Real Estate has its roots in a family office, and has traditionally raised capital from RIAs and Trusts. According to the registration statement:
Established in 2007, the Investment Adviser provides investment advisory, administrative, and related services to two clients: Broadstone Net Lease and Broadtree Residential. Broadstone Net Lease is a REIT that focuses on single-tenant net leased real estate throughout the United States. Broadstone Net Lease focuses on investing in properties for the long term to tenants with a track record of success, profitability, and creditworthiness. Broadtree Residential is a REIT that focuses on acquiring and leasing residential real estate properties. The Investment Adviser also investigates, analyzes, structures, and negotiates potential investments, monitors portfolio investments, and advises as to disposition opportunities. As of September 30, 2017, the Investment Adviser had a total of approximately $2.3 billion of discretionary assets under management.
The Investment Adviser is wholly owned by Broadstone Real Estate, a sponsor and manager of real estate investment offerings that uses industry specific expertise and experience to generate and manage investment opportunities for investors seeking income-oriented real estate alternative investments. Broadstone Real Estate and its affiliates, including the Investment Adviser, currently serve approximately 2,500 shareholders in Broadstone Net Lease and Broadtree Residential and have collectively sponsored or structured real estate transactions totaling more than $2.5 billion in value.
Broadstone is contributing an initial $30 million to the fund. This contribution includes $20 million worth of Broadstone Net Lease shares, and $10 million worth of Broadtree operating company units.
As of June 30, 2017, Broadstone Net Lease owned a diversified portfolio of 459 individual net leased commercial properties located in 37 states, which were 100% leased, with approximately 13.4 million rentable square feet of operational space, 113 different commercial tenants, and no single tenant accounting for 5% or more of its annual rental stream.
As of September 15, 2017, the Broadtree Residential owned 678 single family rentals, 528 multifamily apartment units, and 4 net leased student housing properties, comprising 1,210 total residential units with 95.1% leased and 94.4% occupied. In August 2017, Broadtree Residential announced its intention to transition its investment focus solely to multifamily apartment properties and to sell its existing single family rental homes and net leased student housing assets.
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