Amy Tait, president and CEO of Broadstone Real Estate, LLC, joined REIT.com for a CEO Spotlight video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.
Broadstone Real Estate sponsors Broadstone Net Lease, Inc., a private REIT that invests in single-tenant, net-leased properties throughout the United States, and Broadtree Homes, Inc., a private REIT that invests in single-family homes for rental in multiple markets.
Tait said that after sitting on the sidelines during a frenzy of buying activity in the single-family market, Broadtree is getting ready to “scale up.”
“We had a few hundred homes and they’ve been sort of our science experiment. For us, it’s working out really great,” Tait said. She noted that Broadtree has about 200 units under contract and is seeing “the best buying opportunities of existing stabilized portfolios that we’ve seen in three years.”
In response, Broadstone is getting ready to sponsor another $25 million of equity into the fund in order to buy more single family portfolios and also to start adding apartments into the mix, Tait said.
Meanwhile, Tait said she expects acquisition activity on the net lease front to remain at an accelerated pace.
Broadstone Net Lease has made about $400 million of acquisitions this year, and a total of $500 million to $600 million is expected for the year, according to Tait. “That’s a 60 percent growth from where we started the year at $1 billion, so we’re on a roll, we’re on fire.”
Buying opportunities in net lease are better now than in the past two years, Tait said. This is because a lot of competitors are either on the sidelines entirely or are not as competitive due to subdued stock prices, she explained.
Cap rates have stayed fairly flat for the last couple of years, Tait said, while interest rates are still attractive. “We’re still locking in very positive spreads, and we’re bullish. We expect to acquire a similar amount next year,” Tait said.
Tait also reported that capital raising remains robust following Broadstone’s equity investment from Stone Point Capital, LLC, earlier this year. “Our model seems to be resonating very well with registered investment advisors (RIAs) and other wealth managers, and equity is rolling in at $20 million to $30 million a month for us.”
Tait estimated that Broadstone will raise about $350 million of equity this year. “Our coffers are full; our leverage is low… so we’re looking forward to starting 2016 off with a bang.”