CIT Serves As Sole Lead Arranger On $48 Million Portfolio Financing Of Medical Office Buildings

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CIT Group Inc. announced that its Healthcare Finance business served as sole lead arranger of senior debt financing aggregating $48 million for the acquisition of a portfolio of medical office buildings.

The borrower is a joint venture between Kayne Anderson Real Estate and Remedy Medical Properties. The portfolio properties are located in four states and collectively total more than 189,000 square feet. They include:

• The Bon Secours Medical Office Building  in Chesapeake, Virginia

• The Locust Grove Medical Center in Locust Grove, Georgia

• The Spectrum Medical Office Building in Gilbert, Arizona

• The Arizona Spine and Joint Medical Office Building in Mesa, Arizona

• The Plano Medical Office Building in Plano, Texas

“These medical office buildings are modern facilities in attractive locations, easily accessed by healthcare patients and providers,” said Peter Westmeyer, CEO, Remedy Medical Properties. “We are pleased to add these properties to our portfolio and appreciate CIT’s agility and expertise in arranging financing.”

“Kayne Anderson Real Estate and Remedy Medical Properties are well-known as leading investors in medical office buildings and other real estate,” said William Douglass, managing director and group head for CIT’s Healthcare Finance business. “We are excited to have expanded our relationship with the Kayne Anderson/Remedy joint venture through providing this very important acquisition debt financing.”

CIT’s Healthcare Finance unit, part of the Commercial Finance division, provides comprehensive financing and banking solutions to middle market healthcare companies across the U.S. By using a client-focused and industry-centric model, the Healthcare Finance team can tailor its products and services to help clients meet their needs for growth capital.

 

Source: PRNewswire

Joint Venture Kicks Off $100M MOB Fund

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Chestnut Funds and Anchor Health Properties have launched Chestnut Healthcare Fund II, a new investment vehicle centered on the acquisition of medical office buildings and other related health-care real estate assets across the U.S.

The $100 million real estate private equity investment fund will seek core and core-plus assets over the next 48 months.

“Chestnut Funds and Anchor anticipate many attractive investment opportunities in 2021 and beyond, with the fund focused on approximately 30 key markets across the U.S., where very specific potential investment targets are being identified,” James Schmid, chief investment officer & managing partner with Anchor Health Properties, told Commercial Property Executive.

The launch of Fund II comes five years after the initiation of Chestnut Healthcare Fund I, which, having raised roughly $50 million, will have completed its four-year investment period early this year with the acquisition of 52 assets via direct or joint venture transactions. Due to the U.S.’s aging population, expanded health insurance coverage and a shift in patient services away from hospitals, the medical office building sector has only grown more popular among investors since the 2016 introduction of Fund I. However, Anchor, which will co-manage Fund II with Chestnut Funds, is undaunted by the increased competition.

“There’s no question that institutional investors continue to recognize the performance of the sector across economic cycles and accordingly commit more dollars to sector investments. On behalf of Chestnut Healthcare Fund II, the Anchor team does an excellent job of sourcing off-market opportunities,” Ben Ochs, CEO & managing partner with Anchor Health Properties, told CPE.

Ochs’ assertion is not hyperbole; historically, more than 50 percent of Anchor’s closed transactions are sourced on an off-market basis.

“This allows the fund the opportunity to avoid broadly marketed processes and/or having to pay large portfolio premiums for aggregated asset pools while continually sourcing over $400 million of sector transactions per year,” Ochs continued. “Other investors new to the sector have found it more challenging to source transactions without deeply established relationships and a national infrastructure–elements notable within Anchor’s integrated operating platform of management/leasing, development and investment services.”

Pandemic-Resistant

While no sector of commercial real estate has gone completely unscathed by the COVID-19 pandemic, medical office buildings have survived the lockdowns and temporary halts in elective medical procedures.

“The strong performance of medical office and health-care real estate during the pandemic has really accelerated demand for these investments as a consistent source of stable cash yield and total return,” Schmid said. “While the period between March and June 2020 saw a modest pause in capital markets activity, new investment closings returned in a meaningful way in the second half of the year, and the pipeline of new attractive investment opportunities remains robust.”

Along with announcing the launch of Fund II, Chestnut Funds and Anchor disclosed that they have completed the inaugural seed investment with the purchase of 1408 3rd St. S.E., a 10,000-square-foot medical office building on the campus of Good Samaritan Hospital in the medical corridor in Puyallup, Wash. The high-quality, two-story, metropolitan Seattle property opened in 1997 and is presently occupied by MultiCare Health.

 

Source: Commercial Property Executive

Making Healthcare Facility Renovation Or Update Moves With Little Disruption

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The need for high-functioning healthcare facilities is as clear as ever.

But what happens when a procedural suite needs to be upgraded? Or a major piece of medical equipment needs to be replaced to provide new treatment options to patients?

Traditionally, healthcare facility renovations or updates to large equipment can put essential treatment areas out of commission. However, Light Detection and Ranging (LiDAR) technology, a new form of Building Information Modeling (BIM) that uses lasered beams of light to measure distance, can be used during a project’s exploratory phase to help. LiDAR provides an understanding of the space inside walls and ceilings and under floors before demolition, greatly reducing the amount of time it takes to prepare for and realize improvements.

Utilizing this technology during non-critical hours of operation, a project team can create a 3-D scan of existing conditions, including sections and elevations, and 3-D views of a designated workspace—all without impacting a hospital’s daily activities. Sometimes discoveries made during this process prompt improvements to plans or allow the project team to avoid issues that may not have been realized until after demolishing a space.

Columbia recently partnered with a longtime healthcare client to use LiDAR to provide 3-D existing conditions scans for several CT rooms, one of which contained one of the only units in the region for bariatric patients. The goal was to replace the CT machines on a fast timeline and avoid unforeseen issues that could add to the project schedule and budget.

A limited number of team members visited the hospital during off-hours and scanned all relevant areas. The scans were uploaded and shared with the project partners, avoiding the need to bring a large group through the facility—a critical feature especially during the COVID-19 pandemic, when it’s essential to limit the number of personnel visiting a facility. Furthermore, utilizing the shared scans online helped establish early and effective collaboration among the design, construction, hospital leadership, and equipment vendor teams, with everyone relying on the same set of factual information.

For this particular project, the LiDAR scan improved and streamlined the process in several ways. For example, during a review of the existing conditions scan during a virtual meeting, a team member noticed an existing nurse call button located on one of the CT room walls that had been missed earlier. This detail required bringing in an additional subcontractor to change the positioning of the electrical system, and recognizing this issue before work got underway meant that the team could properly price and schedule the project.

Because we had scanned areas both below the floor and above the ceiling, the project team could also examine the placement of the existing equipment support beams. Knowing whether these were positioned in parallel or perpendicular fashion ensured the new CT units could be properly fitted without any last-minute headaches. The equipment support vendor was also engaged much earlier in the project, ensuring an accurate budget and proper scheduling.

The information gained using LiDAR technology can enable project teams to confidently design and prepare the layout of the structural support for the installation of new hospital equipment; identify the best placement of equipment with regards to access and end-user maneuverability; highlight and prepare for all utility maintenance access needed during construction; and more accurately time procurement of new equipment and feel secure that it will fit the space requirements.

Healthcare is a constantly evolving arena, and LiDAR technology can help address the challenges associated with necessary equipment replacement and space remodels, making it a welcome tool for the industry.

 

Source: healthcare design