Stone Point Capital is buying an equity interest in Broadstone Real Estate LLC. Financial terms weren’t announced. Broadstone is using proceeds to invest in two real estate offerings it currently manages: Broadstone Net Lease and Broadtree Homes. Once the deal closes, Broadstone Real Estate will be jointly owned by the Tait and Leenhouts families, Stone Point’s Trident VI fund and certain BRE employees.
ROCHESTER, N.Y., June 1, 2015 /PRNewswire/ — Broadstone Real Estate, LLC (BRE) today announced that it has signed a definitive agreement to partner with Stone Point Capital to expand and grow BRE’s operating platform as a manager of alternative real estate investments. Stone Point Capital, through its Trident VI fund, will purchase an equity interest in BRE. Proceeds from the investment will be primarily used to invest in the two private real estate investment offerings currently managed by BRE, Broadstone Net Lease (BNL) and Broadtree Homes (BTH). As a result of the transaction, BRE will invest a significant amount of new capital into BNL and BTH. These investments by BRE will substantially increase management’s commitment to both investment offerings.
“We are very excited to welcome Stone Point Capital as our new partner in our operating company,” said Amy Tait, Chairman and CEO of BRE. “As one of the most respected private equity firms in the country, Stone Point has an extensive network and experience that will help us to further expand our businesses. Our objective in this transaction is to align the Broadstone entities with a strategic partner that will support the long term growth of our organization and investment offerings to the benefit of our shareholders. With its capital, industry knowledge and connections, Stone Point is ideally positioned as such a partner.”
Chuck Davis, CEO of Stone Point, said, “We admire Broadstone’s expertise, culture and track record and recognize the strength of its investment process and shareholder relationships. We are delighted to be partnering with Amy and her team and look forward to supporting them as they continue to build additional best in class real estate investment vehicles.”
After the transaction closes, Broadstone Real Estate will be jointly owned by the Tait and Leenhouts families, Trident VI and certain BRE employees. No shares of BRE, BNL or BTH are being sold by the current sponsors. In connection with the transaction, BRE will have a newly formed Board of Managing Members that will include two Trident representatives and two management representatives. In addition, Agha Khan from Stone Point will assume one of the two inside director seats on the BNL and BTH boards, which are appointed by BRE, as the manager. Ms. Tait will continue to serve as the second BRE appointed director and as Chairman of both companies.
“There are no planned changes to the management or investment strategy of our companies; we have an excellent team already assembled and Stone Point’s connections and reputation only serve to enhance our capabilities,” remarked Ms. Tait. “This transaction helps ensure that we will continue to grow in the same disciplined manner and structure for many years to come.”
In connection with the transaction, BNL also will acquire a $10 million convertible preferred interest in Broadstone Real Estate. As consideration for the preferred interest, BRE will receive $10 million of additional common shares of BNL.
“The Broadstone Net Lease Independent Directors carefully monitored the transaction and believe that the convertible preferred interest in BRE is an excellent step towards further aligning interests with BNL’s external manager,” remarked Geoff Rosenberger, Lead Independent Director. “In addition, BNL’s Independent Directors will appoint an observer to the BRE Board to further strengthen communication; lastly, BNL now has a right of first offer on certain BRE interests that may be offered for sale outside the ownership group as it will exist immediately following the transaction.”
The deal is subject to certain closing conditions and no assurance can be made that the transactions described herein will close. The parties have set a target closing date of June 30, 2015.
About Broadstone Net Lease, Broadtree Homes & Stone Point Capital:
Broadstone Net Lease (BNL) is a private real estate investment trust (REIT) that invests in freestanding, single-tenant, triple-net leased properties located throughout the United States. With a diversified, $1.1 billion-plus portfolio of more than 253 medical, industrial and retail properties in 32 states, the REIT targets individual or portfolio acquisitions within the $5 to $100 million range. BNL has over 1,000 accredited investors, and maintains a minimum investment level of $500,000.
Broadtree Homes (BTH) is a private real estate investment offering which seeks to acquire portfolios of stabilized, single-family rental homes in multiple markets across the U.S. BTH currently holds a geographically diversified portfolio of 300+ homes in Western New York; Palm Beach County, Florida; the Atlanta, Georgia area; and the Greater Minneapolis, Minnesota area. Company leadership is excited to offer accredited investors a chance to participate in the consolidation of this emerging, underserved asset class, without the effort and risk of becoming a direct landlord. The offering is open for investment by accredited investors, with a minimum initial investment of $100,000.
Both BNL and BTH are externally managed by BRE and its affiliates. Both offerings remain open for new investment by accredited investors on a monthly basis. For more information, visit Broadstone’s website at www.broadstone.com.
Stone Point Capital (SPC) is a financial services-focused private equity firm based in Greenwich, CT. The firm has raised and managed six private equity funds – the Trident Funds – with aggregate committed capital of approximately $13 billion. In addition to the capital invested by the Trident Funds, Stone Point has secured approximately $7 billion of equity co-investments since 2001. Stone Point targets investments in the global financial services industry, including investments in companies that provide outsourced services to financial institutions, banks and depository institutions, specialty lending and other credit opportunities, asset management firms, insurance and reinsurance companies, insurance distribution and other insurance-related businesses, mortgage services companies and employee benefits and healthcare companies. For further information about Stone Point, see www.stonepoint.com.
SOURCE Broadstone Real Estate, LLC