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NexPoint Makes Co-Investment in DST Offering

NexPoint Makes Co-Investment in DST Offering. Alternative investments, Delaware statutory trusts, DST, NexPoint, NexPoint Storage Partners Inc., real estate investment trust, REIT, storage

NexPoint announced it has made an initial investment in NexPoint Life Sciences II DST, a Delaware statutory trust, through a fund advised by an affiliate.

According to a filing with the Securities and Exchange Commission, the DST’s totaling offering amount is $40.5 million. Launched in June, the offering had raised $1.76 million as of Aug. 18, 2023.

The company says the investment represents 6% of the total equity available and that NexPoint plans to increase the investment size, ultimately targeting 10% to 12% of the total equity available.

The DST acquired two properties earlier this year, as reported by The DI Wire. The properties, located in Philadelphia, are occupied by a subsidiary of Adare Pharmaceuticals Inc., a contract development and manufacturing organization focused on oral dosage forms for the pharmaceutical industry.

Within life sciences, NexPoint says they see contract development and manufacturing organizations (CDMOs)—and the manufacturing facilities they operate—as a “key area of growth.”

NexPoint explains that it sees a “significant demand in the United States for facilities that meet the standards of current good manufacturing practices (cGMP). America’s existing cGMP infrastructure cannot support the development and production needs of the life sciences industry, which is rapidly evolving with the commercialization of novel and emerging products and therapies.”

The company believes other factors adding to demand for cGMP manufacturing facilities are bipartisan governmental initiatives to re-shore manufacturing and supply chains back to the United States, as well as the sector growth in healthcare that is driving commercial-scale pharmaceutical manufacturing activity. NexPoint’s co-investment in the Life Sciences II DST is driven by these industry trends, along with the predictable cash flow offered by the properties’ triple-net tenant, Adare Pharmaceuticals, Inc.

“Real estate plays a critical role in this rapidly evolving industry and can help accelerate innovation for life sciences companies at all stages of development,” said Matt McGraner, NexPoint Real Estate Advisors’ chief investment officer. “As we continue to grow our life sciences platform, our investment in NexPoint Life Sciences II DST allows us to dedicate capital alongside our investor base and increase our exposure to cGMP facilities, which we believe have some of the strongest tailwinds within life sciences real estate.”

NexPoint says it expects to pursue additional opportunities in the cGMP space and plans to continue to invest alongside investors in future life sciences offerings.

NexPoint is a multibillion-dollar alternative investment firm comprised of a group of investment advisers and sponsors, a broker-dealer, and a suite of related investment vehicles.

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