Broadstone’s New Interval Fund Now Open for Investment
ROCHESTER, N.Y. – Broadstone Real Estate, LLC (“Broadstone”) today announced the launch of Broadstone Real Estate Access Fund (”BDREX” or the “Fund”), a continuously offered, closed-end interval fund, registered under the Investment Company Act of 1940. The Fund’s registration was declared effective by the Securities and Exchange Commission on October 1, 2018.
BDREX seeks to deliver total return on behalf of investors via generation of current income and appreciation of capital, while offering low correlation to the public equity markets and low-to-moderate volatility. The Fund intends to invest in public exchange-traded Real Estate Investment Trust (REIT) securities, private/institutional real estate funds, and direct real estate investments.
BDREX is available in two share classes: Class W (BDRWX) and Class I (BDREX), with an initial NAV of $10.00 per share. The minimum initial investment is $2,500 for Class W shares and $1 million for Class I shares. Class I was created to serve the clients of Registered Investment Advisers (RIAs) and Wealth Managers, and provide a reduced-fee share class to individual investors seeking to invest more than $1 million. RIAs and Wealth Managers investing in Class I must achieve an aggregate of $1 million in BDREX investment across their client base.
As a sponsor and manager of real estate investment offerings for individual investors and institutions seeking income-oriented alternatives to the public equity markets, Broadstone has acquired more than $3 billion of direct real estate on behalf of investors. Management initially seeded the Fund with insider capital, showing considerable fund sponsor alignment and support.
“We are thrilled to announce the launch of BDREX,” said Kate Davis, BDREX’s President and Portfolio Manager.“Broadstone has built a robust team and network to support this offering, which includes the management of a portfolio of public real estate equities, the sourcing of private fund investment opportunities, and the acquisition of direct real estate.”
“The Broadstone Real Estate Access Fund represents our firm’s continuing commitment to expanding the Broadstone platform and portfolio of offerings,” said Chris Czarnecki, Chief Executive Officer and President of Broadstone. “We continue to focus on providing our investors access to diversified institutional real estate with a low correlation to the public equity markets. BDREX was specifically designed with these objectives in mind and we are excited to launch.”
ALPS Fund Services, Inc. and ALPS Distributors, Inc. serve as the Fund’s Administrator and Distributor, respectively. DST Systems, Inc. the parent company of the Distributor, serves as the Transfer Agent to the Fund. Heitman Real Estate Securities LLC (“Heitman”) serves as the Fund’s Sub-Adviser, and has delegated investment discretion for making the Fund’s investments that are allocated to publicly traded commercial real estate (“CRE”) securities. UMB Bank, N.A. serves as the Fund’s Custodian.
About Broadstone Real Estate Access Fund:
BDREX is a continuously offered, closed-end interval fund, registered under the Investment Company Act of 1940, that deploys investor capital into a diversified pool of actively managed real estate holdings, blending investment in direct individual real estate transactions; private real estate funds; and public real estate securities. Investors may benefit from the access and diversification afforded by the Fund, along with its periodic liquidity and daily pricing features. BDREX is open for investment to individual and institutional investors with a minimum initial investment of $2,500 for Class W shares and $1 million for Class I shares. All prospective investors are invited to download an investor kit: broadstone.com/lp/BDREX.
An interval fund, such as BDREX, is a continuously offered, closed-end investment company that periodically offers to repurchase its shares from shareholders. The number of shares that BDREX will offer to repurchase will be determined by its Board of Directors on a quarterly basis. Redemptions within 90 days of purchase may be subject to a fee. There is no guarantee that an investor will be able to sell all the shares that the investor desires to sell in any repurchase offer.
The Fund’s shares will not be listed on an exchange and it is not anticipated that a secondary market will develop. The Fund is a new company and has no operating history. An investment is not suitable for investors that require liquidity, other than through the Fund’s repurchase policy. Investing in BDREX involves risks, including loss of principal and the other risks set forth in the “Risk Factors” section of the prospectus.
BDREX investments in direct real estate will be comprised of commercial real estate investments, including direct and indirect investments in commercial real estate properties. Private real estate investments will include investments in private real estate investment funds, including private equity and unregistered investment funds that principally invest, directly or indirectly, in real estate and real estate-related investments. Public real estate securities include commercial real estate-related securities, including those of publicly traded real estate investment trusts, commercial mortgage-backed securities, real estate operating companies, and exchange-traded funds. Private real estate investment funds, direct real estate investments, and REITs may pursue investment strategies that compete with each other or do not align with those of the Fund. The Fund is not intended as a complete investment program but instead as a way to help investors diversify into real estate. Diversification does not ensure a profit or guarantee against a loss.
Because BDREX’s direct real estate investments will be relatively illiquid, the Fund may not be able to vary its portfolio in response to changes in economic and other conditions, which may result in losses to the Fund. The bankruptcy, insolvency or financial deterioration of any of the tenants of the Fund’s direct real estate investments could significantly delay the ability to collect unpaid rents or require the Fund to find new tenants. With respect to BDREX’s investments in private real estate investment funds, the Fund may not have the sole decision-making authority over such funds and may be unable to take actions to protect its interests in these investments. The Fund may be subject to additional risks if it fails to meet a capital call from a private real estate investment fund and the underlying fund may pursue investment strategies that compete with each other or do not align with those of the Fund. Valuations provided by the institutional asset managers of private real estate investment funds may not be accurate or reliable. BDREX’s investments in the securities of publicly traded REITs will be subject to the risks affecting these REITs directly. There can be no assurance that an entity in which the Fund invests with the expectation that it will be taxed as a REIT will, in fact, qualify as a REIT. An entity that fails to qualify as a REIT would be subject to a corporate level tax, would not be entitled to a deduction for dividends paid to its shareholders, and would not pass through to its shareholders the character of income earned by the entity. Complying with REIT requirements may force the Fund to liquidate or forego otherwise attractive investments and REIT distribution requirements could adversely affect the Fund’s ability to execute its investment strategy.
Real estate risk factors include, but are not limited to, the fact that direct ownership of real estate is subject to fluctuations in the value of the underlying properties, the impact of economic conditions on real estate values, the strength of specific industries renting properties and defaults by borrowers or tenants. Real estate is a cyclical business, highly sensitive to general and local economic conditions and developments, and characterized by intense competition and periodic overbuilding. Changing interest rates and credit quality requirements may affect the cash flow of real estate companies and their ability to borrow or lend money or to meet capital needs.
AN INVESTOR SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. TO OBTAIN A PROSPECTUS CONTAINING THIS AND OTHER INFORMATION, PLEASE CONTACT YOUR FINANCIAL ADVISOR OR DOWNLOAD THE FILE FROM WWW.BDREX.COM.
The Fund is distributed by ALPS Distributors, Inc. (ALPS). ALPS is not affiliated with BDREX, Broadstone Real Estate, LLC, Heitman Real Estate Securities LLC, or UMB Bank, NA.