A real estate investment trust with hundreds of U.S. properties and ties to a 47-year-old firm that has $5 billion in assets has filed for an initial public offering, seeking to raise up to $100 million.
FrontView REIT, with a headquarters office in Dallas, filed for an IPO with the Securities and Exchange Commission this week. The company's portfolio includes 278 properties in 31 states as of the end of June that are leased to major companies such as Walgreens, Raising Cane's, AT&T, CVS, Verizon, IHOP and Chili's.
FrontView focuses on investing primarily in "well-located, net-leased outparcel properties that provide high visibility to consumers," the company said in the filing.
Outparcel properties refer to individual buildings with direct frontage on high-traffic roads, making them ideal to house pharmacies, fast-food restaurants and small retailers. In a net lease, a tenant pays rent plus the property's operating expenses.
The REIT is eyeing at least $45.2 million of potential acquisitions, the filing states, but has not entered into any purchase or sales agreement as of the filing date.
FrontView REIT was created in 2016 by Stephen Preston, who served as a principal at North American Development Group, a West Palm Beach, Florida-based real estate investor and developer of commercial, residential and net-lease real estate in the U.S. and Canada, according to the filing. The company, known by its acronym NADG, has about $5 billion of assets under management.
Preston is still listed as a company executive on the firm's website, leading the NADG NNN business. The predecessor of FrontView, NADG NNN Property Fund, is affiliated with North American Development Group, the filing states.
North American Development Group and FrontView REIT share an office address along McKinney Avenue in Uptown Dallas. A CoStar News request to Preston and North American Development Group seeking additional details was not immediately returned.
"We believe our tenants value the prominent location of our outparcel properties with frontage on high-traffic roads that are highly visible to consumers and drive demand for their core business operations," FrontView said in the filing. "In addition, our tenants are able to retain operational control of their strategically important locations through long-term net leases."
FrontView intends to file as a real estate investment trust for U.S. tax purposes, according to the filing. The REIT is expected to trade on the New York Stock Exchange under the symbol FVR.
From its inception in 2016, the filing states, the company has acquired more than $786 million of net-leased real estate. In the past 12 months, FrontView's predecessor has reported nearly $56 million of revenue.
As of the end of June, FrontView's real estate portfolio that spanned 2.1 million square feet was 98.9% occupied by 292 tenants representing 137 brands, according to the filing. The average remaining lease term is about seven years, the company said. The portfolio is also diversified by brand and location, with no tenant accounting for more than 4% of the portfolio and no state exceeding 12.1% of the annual rent collected by the REIT.
In August 2023, the prior iteration of FrontView acquired 54 properties from a Toronto-based REIT in a deal totaling more than $138 million. North American Development Group has also been a retail buyer, having purchased a 1.15 million-square-foot mall last May in Florida in a joint venture with an institutional partner.