The Dry Creek Medical Office Building In Englewood, Colorado, Acquired For $15.6M

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Broe Real Estate Group (BREG), a private real estate investment firm and affiliate of The Broe Group, headquartered in Denver, Colorado, confirmed the $15.6M acquisition of a 57,257 square foot medical pavilion located on 4.23 acres at 125 Inverness Drive East, Englewood, Colorado.

Constructed in 2000, the three-story multi-specialty medical building located in Arapahoe County is uniquely located proximate to four greater Denver area hospitals including Sky Ridge Medical Center (3.4 miles), Centennial Medical Plaza (2.3 miles), Medical Center of Aurora (7.5 miles) and Littleton Adventist Hospital (6.2 miles). The property is an attractive, off-campus medical office asset located in a well-established suburban office and residential hub within one of the fastest growing metropolitan regions in the United States.

“This acquisition is the latest example of our medical office building repositioning strategy,” says BREG CEO Doug Wells. “As a local operator, the BREG team is well-suited to address pending tenant roll and secure strong long-term occupancy. By investing significant capital in physical upgrades and leasing costs and executing a focused asset management program, we will ensure that our tenants can continue to deliver the needed medical services for Coloradans that live and work in south Denver’s rapidly growing region.”

The Dry Creek Medical Office Building marks BREG‘s fourth major MOB repositioning project in the past twelve months totaling nearly 540,000 square feet. Medical assets continue to play a major role in BREG’s Western United States acquisition strategy as it continues to assess opportunities with viable institutional medical exits.

Chris Bodnar and Lee Asher from CBRE Healthcare Capital Markets listed the property for sale.

“Market demand for non-hospital medical services is at an all-time high and Colorado’s population growth continues to exceed national growth rate. Dry Creek Medical Office Building is an institutional quality asset within a highly established, high growth market,” noted Chris Bodnar, CBRE Vice Chairman.

 

Source: Yahoo! Finance

Welltower Sells Senior Living Portfolio for $1.8B; Signs $1B Development Deal

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Healthcare REIT Welltower has signed a $1 billion development agreement with Discovery Senior Living, as well as acquired a handful of facilities from the company along with a 6-building, 270,000 square foot medical office campus for $140 million from Summit Medical Group.

The exclusive development agreement focuses on two new projects that the companies are currently reviewing. That, however, is just one piece of a number of agreements struck by the two companies, which have a pre-existing relationship.

“We are excited by the opportunity to expand a key operator relationship,” said Welltower’s Chief Investment Officer Shankh Mitra, in prepared remarks.

Among its agreements, Welltower has:

– Sold its stake in the Benchmark Senior Living portfolio for $1.8 billion. Benchmark has recapitalized the portfolio with private institutional capital. The 4,137-unit seniors housing portfolio consists of 48 assisted living properties located in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, and had $24 million of secured debt that was extinguished at closing.

– Made an off-market acquisition of three infill seniors housing campuses that are located in the Dallas-Fort Worth and San Antonio metro areas. The portfolio, recently developed by South Bay was acquired for $216 million, or $280,000 per unit, through a newly formed joint venture between Discovery and Welltower. Once the last phase of the Alliance Town Center development in Dallas-Fort Worth opens in the fourth quarter of 2019, the total cost of the portfolio will be $237 million, or $273,000 per unit. In-place occupancy throughout the recently built portfolio (excluding the last phase of the Alliance Town Center) was 72% upon acquisition.

– Gone under contract to fund three newly opened assets located within Discovery’s core footprint in Florida for $92.7 million, or $255,000 per unit. These three buildings achieved certificates of occupancy in the second quarter of 2019. “All of these assets, including those that are under contract, are steel and concrete construction and represent a significant discount to Discovery transactions we have seen in the marketplace recently,” Mitra says.

– Entered into a definitive purchase agreement to purchase a 43-acre, 6-building, 270,000 square foot medical office campus in Berkeley Heights, NJ for $140 million. The campus will be master leased by Summit Medical Group, an independent multispecialty medical practice, under a new 20-year, absolute net lease. This campus is the largest and most comprehensive of five “hubs” in Summit’s 80-location hub-and-spoke model, and will bring Welltower’s total Summit-leased footprint to over 500,000 square feet. The sale is expected to close in the third quarter of 2019, subject to customary closing conditions. The sale of the medical office campus is conditioned upon Summit’s recently announced intended merger with CityMD.

– Acquired a six-community portfolio located in the Denver and Boulder metro areas from Colorado-based Balfour Senior Living for $308 million. The portfolio includes Balfour’s downtown Denver flagship community, Riverfront Park, and the recently developed Lavender Farms, which opened in April. As part of the portfolio purchase, Welltower has received exclusivity on Balfour’s future acquisition and development pipeline, as well as an option to acquire up to a 34.9% interest in Balfour’s management company. Several development initiatives are currently underway in East Coast markets, rapidly expanding the existing relationship between Welltower and Balfour.

 

Source: GlobeSt.

This Will Impact Florida Healthcare For Years To Come

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Advancements in technology, changes in legislation and the expansion of ambulatory care are changing the face of healthcare across the U.S.

Florida’s healthcare industry is experiencing a major shift as real estate prices rise and proposals for new facilities continue to pop up since the elimination of the Certificate of Need rules. Healthcare industry leaders will discuss these issues at Bisnow’s upcoming South Florida Healthcare Real Estate Event on Aug. 8.

As of July 1, Florida healthcare facilities are no longer required to obtain a Certificate of Need from the state before beginning construction. Jackson Health System Chief Operating Officer and Executive Vice President Don Steigman says he has already seen the impact on construction.

“There has already been a plethora of planned expansion in the ambulatory arena,” Steigman said. “Hospitals, physician practice groups and other healthcare providers have begun placing a greater emphasis on the outpatient side of care, giving communities access to free-standing emergency rooms, urgent care centers and group practices.”

Bisnow spoke to Steigman to learn more about what this change means for the future of healthcare in Florida and to get a preview of what he will be speaking about at Bisnow’s South Florida Healthcare Real Estate event.

Bisnow: Why is Bisnow’s upcoming South Florida Healthcare Real Estate event so important to you and what will you be speaking about?

Don Steigman: Since the elimination of the Certificate of Need rules, hospitals can be opened in Florida without the state having to approve the need for new hospitals. These healthcare facilities will still go through a licensing process, but they won’t have to prove that there’s a need in a community to build a facility.  This is a huge change that will impact the landscape of healthcare real estate in Florida for years to come.

Bisnow: Can you tell me a bit about what you do at Jackson Health System?

Steigman: I’m the chief operating officer for Jackson Health System. I’m responsible for the day-to-day operations of our hospitals, support services and ambulatory services, including our outpatient facilities and urgent care centers. Additionally, I’m responsible for the strategic growth of our operations.

Bisnow: What is the most pressing issue currently impacting healthcare real estate in South Florida?

Steigman: Right now, I believe it’s the challenges that come with aligning the real estate values in South Florida with the income that will be produced by these new healthcare enterprises. There are tremendous economic pressures placed on healthcare facilities and these pressures, combined with rising real estate value in South Florida, are limiting the feasibility of some proposed new healthcare projects.  On a more positive note, the healthcare real estate market is growing throughout all of Florida and I believe there will be many opportunities for new ambulatory healthcare facilities to open in cities across the state.

Bisnow: Outside of your work, what are you most passionate about?

Steigman: When I’m not working, I enjoy reading, running and going on hikes. I’m also on the board of my local chapter of The Liver Foundation.

 

Source: Bisnow