A landlord focused on real estate for veterinary practices has launched a private real estate investment trust.

Terravet Real Estate Solutions, a Pennsylvania-based landlord with 1M SF of healthcare and veterinary real estate across 31 states, aims to scale its pool of real estate to several hundred specialty and emergency veterinary hospitals in addition to general practice facilities, it announced Monday in a press release.

The REIT is structured to allow private owners of property — many of whom are vets themselves — to contribute their assets and become investors in the larger fund. It gives smaller owners the chance to reduce risk, defer taxes and increase their value, Terravet said in the release.

Terravet plans to capitalize on veterinary care’s sharp upward trajectory during the pandemic — pet care spending reached more than $32.3B in 2021, following 23 million Americans’ adoption of pets over the course of the pandemic, according to the release.

Terravet uses two of its existing funds to help capitalize the REIT, in addition to leveraging a longstanding relationship with lenders to secure a debt facility, Commercial Observer reported.

The market has potential as a hybrid between medical care and net-lease retail, CEO Daniel Eisenstadt told CO.

“There are a lot of veterinarians that don’t necessarily want to sell their property, but are much more interested in an UPREIT structure where they can contribute property to a pool and get the benefits of diversification,” Eisenstadt said. “They want to be in a pool of veterinary real estate since that is what they know, and they’re bullish on the sector, and that really hasn’t existed at any scale really up until now.”

Terravet REIT is planning its first round of acquisitions, which will be in high-growth, suburban metropolitan markets in states including Alabama, Arizona, Florida, Nevada, Pennsylvania, Tennessee and Texas, Eisenstadt said.

Those acquisitions will see approximately 20 veterinary assets, totaling a value of around $100M, in the REIT’s ownership amid its plans to scale significantly, Commercial Observer reported. Terravet will focus on property acquisitions valued at approximately $5M, according to the release.