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Bond Street REIT, a leading owner of Class A convenience retail shopping centers, announced that affiliates of Conversant Capital LLC have committed up to $300 million of growth equity to its private REIT.
Officials said the investment will be used to expand Bond Street's 39-asset portfolio and capitalize upon the strong fundamentals exhibited by well-located, necessity-oriented convenience retail.
Limited supply, strong tenant demand and low capital intensity are hallmarks of the asset class, the officials said.
They added these attributes, when combined with Bond Street's proven operating model and sourcing capabilities, create a compelling opportunity for long-term value creation.
With proceeds from Conversant's investment, Bond Street anticipates acquiring over $150 million of assets annually and has $60 million of new acquisitions identified and expected to close in the coming months.
Contemporaneously with Conversant's commitment, assets held in separately capitalized Bond Street-advised entities will roll into the REIT.
"We are delighted to announce Conversant's commitment and are excited for our partnership. It is clear to us that their experience in scaling real estate platforms will be invaluable as we embark on the next phase of our growth" said Michael D. Reynolds, founder and chief executive officer of Bond Street.
Since its founding in 2014, Bond Street has assembled a portfolio of convenience centers in high-growth, low-tax, southern markets.
Its portfolio is spread across South Carolina, North Carolina, Virginia, Tennessee, Alabama, Georgia, Indiana, Kentucky and Texas.
The company's portfolio counts Starbucks, Chipotle, and Panera Bread as top tenants and has demonstrated industry-leading operating metrics, including capital expenditures as a percentage of NOI below 8 percent and double-digit re-leasing spreads.
"Now is an opportune time to acquire convenience retail assets, and we're excited by the opportunity to scale the Bond Street platform," said Michael Simanovsky, managing partner of Conversant. "With the attractive supply dynamic, strong market rent growth, and institutionalization of the asset class, we see convenience retail as uniquely positioned to outperform over the long-term."
Bond Street REIT is a private real estate investment trust focused on the acquisition and ownership of Class A convenience retail centers across high-growth Southeast and Midwest markets.
Conversant Capital LLC is a private investment firm founded in 2020. The firm pursues credit and equity investments within the real estate, digital infrastructure and hospitality sectors in both the public and private markets.
Bond Street was advised by Allen Matkins Leck Gamble Mallory & Natsis LLP and Forvis Mazars.
Conversant was advised by Fried Frank, Harris, Shriver & Jacobson LLP, JLL, and George Smith Partners.
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