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Terravet Launches Private REIT to Invest in Veterinary Real Estate

Terravet Real Estate Solutions, a real estate group focused on veterinary practice real estate, has launched Terravet REIT Inc., the company’s first private real estate investment trust.

Terravet Real Estate Solutions, a real estate group focused on veterinary practice real estate, has launched Terravet REIT Inc., the company’s first private real estate investment trust, that will invest in large general practice veterinary facilities and specialty/emergency veterinary hospital facilities nationwide.

As a perpetual life vehicle, Terravet REIT plans to focus on veterinary practice real estate with an expected average purchase price of a property to be approximately $5 million at the outset. “Upon completion of its initial acquisitions, the REIT expects to own approximately 20 facilities valued at around $100 million and aims to grow over the next 18 months.” Two of Terravet’s existing funds contributed to the REIT’s capitalization, and the firm also secured a debt facility.

A spokesperson for the company said that while Terravet does not intend to raise additional equity for the new REIT in the short term, it will instead fund the equity needs from its existing funds. “Many of its fund investors came through the RIA channel, and in the future when Terravet REIT does choose to raise equity, the RIA channel would be a likely source.”

The REIT comes at a time of growth in the veterinary sector. According to Terravet, total spending on veterinary care in 2021 reached record highs of $32.3 billion with more than 23 million Americans adopting pets in the last year. The company said that, as a result of this growth, significant institutional capital has been invested in veterinary operations over the past decade, but most veterinary real estate continues to be held by veterinarians.

“Our new REIT offers a differentiated opportunity for entrepreneurial veterinarians to increase the value of their real estate holdings while also diversifying their risk,” said Daniel Eisenstadt, founder and chief executive officer of Terravet Real Estate Solutions, and a founder of the Terravet REIT.

“Savvy veterinarians recognize the value of their real estate but may be hesitant to sell their property due to potential tax and other considerations. By using Terravet’s UPREIT structure, we can offer a tax-advantaged solution for single-property owners to contribute their facilities to a veterinary-focused REIT and in turn, reap diversification benefits and the possibility of enhanced value and liquidity down the road,” he added.

Terravet Real Estate Solutions founded the REIT that is majority owned by players in the veterinary sector, including partners Randy Bimes, doctor of veterinary medicine (VMD) and chair of the Community Veterinary Partners Medical Advisory Board; Samuel Geller, VMD and lead small animal veterinarian at Quakertown Veterinary Clinic in Quakertown, Pennsylvania; Hank Wright, DVM; and Jimmy Murphy, DVM, of The Pet Hospitals in Memphis.

Terravet REIT will be overseen by a board of directors that will include Neil Tauber, a founder of VCA Animal Hospitals, and Terry O’Neil, partner at Katz, Sapper & Miller’s Veterinary Services Group.

Terravet Real Estate Solutions is a real estate group that owns and manages veterinary properties and certain other healthcare properties across the United States. Terravet owns more than one million square feet of veterinary and healthcare real estate located in 31 states.

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