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  • Writer's pictureRealFacts Editorial Team

Terravet REIT: Unleashing Opportunities in Veterinary Real Estate Investment

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As pet ownership surges and veterinary medicine advances, the demand for veterinary services is skyrocketing. However, while institutional investment in veterinary practices has flourished, the real estate aspect of these facilities has been relatively overlooked. Enter Terravet REIT Inc., seizing the opportunity to bridge this gap and revolutionize the landscape of veterinary real estate investment.

Terravet's inception traces back to Daniel Eisenstadt's astute observation in 2012. As president of Community Veterinary Partners at the time, Eisenstadt realized the untapped potential in veterinary real estate amidst the burgeoning consolidation within the veterinary care sector. The acquisition of a building leased to Community Veterinary Partners sparked Eisenstadt's vision for Terravet, leading to the establishment of Terravet Real Estate Solutions and, subsequently, Terravet REIT.

Since its founding, Terravet has been at the forefront of veterinary real estate investment. In 2018, the company launched its first institutional fund, followed by another in 2020, collectively raising substantial capital for acquiring veterinary real estate. This culminated in the formation of Terravet REIT through an UPREIT exchange transaction in partnership with entrepreneurial veterinarians.

Today, Terravet boasts a portfolio of approximately 200 properties across more than 35 states, primarily comprising single-tenant, freestanding buildings leased to corporate owners and operators of veterinary practices. Notably, Terravet REIT is predominantly owned by veterinarians, highlighting its alignment with industry insiders and stakeholders.

Historically, veterinary practices were predominantly owned by individual doctors operating out of self-owned or developed buildings. However, the landscape shifted dramatically with the rise of corporate consolidators like Veterinary Centers of America and private equity investments in the late 1990s and early 2000s. While these entities focused on acquiring practices, they largely overlooked the underlying real estate assets, leaving a significant opportunity for Terravet to capitalize on.

Eisenstadt underscores the uniqueness of this opportunity, emphasizing the transition from mom-and-pop owned properties to corporate-leased buildings, enhancing the creditworthiness and stability of veterinary real estate investments.

The surge in pet ownership, particularly among millennials and Gen Zers, has been a driving force behind the exponential growth in veterinary services spending. With advances in veterinary medicine and a cultural shift towards preventative care, spending on veterinary services has experienced robust compound annual growth rates. Eisenstadt projects continued growth in the years ahead, buoyed by demographic trends and evolving pet care practices.

Terravet's strategic approach extends beyond veterinary real estate, encompassing specialized areas of healthcare such as ophthalmology. By identifying emerging opportunities in highly specialized medical fields, Terravet aims to diversify its portfolio while maintaining a focus on single-tenant net lease properties. The company's early mover advantage positions it as a trailblazer in niche medical and veterinary real estate investment.

With a current portfolio valued at approximately $500 million, Terravet envisions scaling its holdings to exceed $1 billion in the coming years. Eisenstadt draws parallels with other sectors like self-storage and student housing, where early movers capitalized on niche markets before broader institutional interest emerged. As Terravet continues to expand its footprint, it remains poised to shape the future of veterinary real estate investment and beyond.

In essence, Terravet REIT's innovative approach underscores the transformative potential of veterinary real estate investment. By leveraging market trends, industry expertise, and strategic partnerships, Terravet is paving the way for a new era in healthcare real estate investment, one paw print at a time.

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