Savlan Capital Targets $100M Investment In Single-Tenant Health Care Buildings In 2021

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Savlan Capital has purchased six single-tenant medical office buildings for $13.4 million.

The investments, located throughout the United States, offered cap rates ranging between 7 to 8.5 percent. The Hollywood, Florida-based real estate investment group purchased the buildings over the last three months, diversifying its existing portfolio of commercial properties by securing single-tenant, NNN health care assets.

Savlan Capital’s move into this asset class reflects an expansion of the company’s investment philosophy.

“We are now focused on single-tenant, NNN health care facilities housing tenants with long-term leases in place,” said Savlan Capital Chief Executive Officer Zusha Tenenbaum. “These assets provide essential services to their respective communities and offer strong fundamentals, reliable cash-on-cash returns, and are quite resilient in the face of E-commerce and recession.”

Savlan Capital plans to invest approximately $100 million in the asset class this year. The company currently has eight additional properties under contract and plans to close on a significant number of these deals in the third quarter.

“We continue to focus on creating above-market, risk-adjusted value for our partners,” added Tenenbaum. “Our experience in acquiring, leasing, and managing real estate adds crucial value that will contribute to the portfolio’s success.”

Savlan Capital’s recent acquisitions include buildings in Texas, New Mexico, Florida, Oklahoma, Ohio, and Alabama.

Texas

The company purchased a ±10,698-square foot medical office building located at 108 Twin Fountains Drive in Victoria, Texas. The building, developed in 2011, is fully leased to Mesa, AZ-based NextCare Ugent Care.

Patrick R. Luther led a team from SRS Real Estate Partners in representing both the seller and Savlan Capital in the transaction, which closed March 24.

 

New Mexico

Savlan Capital acquired a ±14,843-square-foot freestanding medical office building at 401 North Canal Street in Carlsbad, New Mexico on March 24. The building, constructed in 1993, is leased to Carlsbad Medical Center, an outpatient medical facility and affiliate of Community Health System, Inc. (NYSE:CYH), which operates 110 hospitals in 19 states. No broker was involved in this transaction.

 

Florida

On April 9, Savlan Capital acquired a ±4,634-square-foot building situated at 2959 Fruitville Road in Sarasota, Florida. The building was developed in 1987 and is occupied by Birmingham, AL-based Southern Veterinary Partners.

Savlan Capital and the seller were represented by a team from Matthews Real Estate Investment Services led by Andrew Evans.

 

Oklahoma

Savlan Capital acquired a ±5,125-square-foot outpatient medical office at 3209 North Flood Avenue in Norman, OK on May 14. The structure, built in 1983 and renovated in 2018, is occupied by Direct Orthopedic Care (DOC).

Jeff Matulis led a team from Stan Johnson Company in representing both Savlan Capital and the seller in the transaction.

 

Ohio

Savlan Capital purchased a ±6,787-square foot facility at 4660 Roberts Road in Columbus, Ohio on April 9. The building, constructed in 1988, is fully leased to Cincinnati-based Brightview Health.

Jason Lenhoff from Quantum Real Estate Advisors represented both parties in this transaction.

 

Alabama

On March 24, Savlan Capital acquired a ±3,373-square-foot building at 2134 Douglas Avenue in Brewton, Alabama. MainStreet Family Care fully occupies the facility, which was constructed in 2017.

Neal Brock of Sands Investment Group represented both Savlan Capital and the seller.

 

Sila Zeros In On Healthcare With $1.3B Data Center Portfolio Sale

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With the sale of a 29-property data center portfolio, Sila Realty Trust is exiting the data center space to focus on healthcare.

Sila sold 29 data center properties to Mapletree Industrial Trust, a REIT listed on the Singapore Exchange, for $1.3 billion. The transaction will be completed in one or more closings during Q3 2021.

“This action marks another key step in Sila Realty Trust’s evolution to provide a clear path for the company to pursue a strategy as a pure-play healthcare REIT,” said Michael A. Seton, Sila CEO and president in a prepared statement.

Sila Realty Trust, previously known as Carter Validus Mission Critical REIT II, owned both data centers and healthcare assets before the sale.

As one example of the type of assets it seeks, last September Sila purchased Tampa Healthcare Facility, a 33,822 rentable square foot medical office building constructed in 2015. The building is located on 2.87 acres in Tampa, the second-fastest growing market in Florida and the twelfth-fastest growing market in the US. The facility, which was 100% net-leased to six tenants at the time of the sale, serves as a strategic location for both primary and urgent care, pediatric spinal care, clinical laboratory services and various types of outpatient surgery.

In the release announcing the sale, Seton said the company was focused on acquiring high-quality, well-located assets with a strong and diverse tenant roster.

“All of these attributes are indicative of our existing portfolio combination and we expect this property will serve as a strong complement to our growing asset base,” Seton said at the time.

It shouldn’t be a surprise that Sila is focusing on the medical sector. It has held up exceptionally well through the pandemic. While medical office buildings sales volume declined in 2020, it was much less of a drop than the other commercial real estate sectors, according to a report from Colliers.

MOB investment decreased 12.2% year-over-year in 2020 to hit $11.1 billion, according to Colliers, while cap rates fell 20 basis points to 6.5%. By comparison, commercial real estate posted a 32% decline in sales volume overall.

 

Source: GlobeSt.

$1B Mixed-Use Frisco Project To Include Medical, Wellness Uses

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Frisco City Council voted unanimously May 18 to approve a rezoning request that paves the way for a $1 billion mixed-use development east of the PGA Frisco project.

This rendering shows The Link, a nearly 240-acre mixed-use development planned in Frisco. (Rendering Courtesy: City Of Frisco)

The Link is estimated to generate $7 million a year in property tax revenue and $3 million a year in sales tax revenue once fully built out. The 2 million to 2.5 million square feet of office space would attract between 8,000 and 10,000 jobs, according to project estimates. And an untold number of other jobs would be created at the site for the restaurant, retail, hospitality, wellness, medical and entertainment uses planned there.

 “This project checks a lot of the boxes for Frisco,” said Council Member Will Sowell said. “Who wouldn’t want this development in their city?”

This map shows the location of The Link mixed-use development south of US 380 along Legacy Drive. (Courtes: City Of Frisco)

“The developers took an odd-shaped plot of land with a flood plain in the middle of it and created what is expected to be a world-class project,” said Mayor Jeff Cheney. “We’re sitting here today talking about potentially building a $1 billion development because of the halo effect of the PGA.”

The May 18 vote was the third time that the nearly 240-acre project had come before City Council. In two previous meetings, the project was tabled after some council members expressed concerns with density and the timing of the trail construction.

Frisco Development Services Director John Lettelleir presents plans for The Link to the Frisco City Council on May 18. (Screenshot Courtesy: City Of Frisco)

The approved plan has 150 fewer residential units than the original request. The plan allows for up to 2,206 multifamily units, at least 500 of which must use concrete and steel construction. The revisions also allow for up to 500 single-family and cottage homes.

In addition, the developers agreed to construct the 3.5-mile hike and bike trail during the first phase of construction. The trail must be completed before the first certificate of occupancy is issued.

Project representative Clay Roby called the trail “the heartbeat of the development” that will connect The Link to the resort-style development that will be the new home of the PGA.

“We’ve created … a large pedestrian promenade that goes through the center of the development, ensuring that it’s a very walkable mixed-use property,” said Roby, a managing director at Stillwater Capital.

“A lot of work went into the final plans for The Link,” said Council Member Shona Huffman. “We can’t let down our guard. We still have to push for better. And that’s what we did here tonight. I really do appreciate that the developer worked really hard with us to get better.”

“The council took a long-range view of the community in approving a project that will affect generations to come,” said Cheney. “This is a project we should be celebrating. This should be an exciting day in Frisco’s history.”

 

Source: Community Impact