Harrison Street Buying Senior Housing Portfolio For $1.2B, Selling MOBs For $371M

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Harrison Street Real Estate Capital is set to acquire a portfolio of 24 senior housing communities for about $1.2B as it sells a medical office building portfolio of about half that size.

The senior living properties, which are mostly in California but also Nevada, are operated by Oakmont Senior Living. The portfolio totals 2,195 units that are mainly assisted living and memory care. The sellers are the Gallaher Cos. and Healthpeak Properties, which each own 12 properties in the portfolio.

The Healthpeak communities are on average 4 years old, with occupancies stabilized at 96% from 2016 to 2019, according to Harrison Street, adding that the Gallaher assets are recently built as well.

“The senior housing sector remained resilient throughout the pandemic and is poised for growth,” Harrison Street Global Chief Investment Officer Michael Gordon said in a statement. “Specifically, the assets we are acquiring are managed by a leading operator in Oakmont and located in attractive markets backed by solid demographics.”

Chicago-based Harrison Street in December raised $720M for a new fund that will focus at least partly on senior housing, Senior Housing News reports. The fund could raise as much as $2B. In February, Harrison Street bought 12 senior housing communities from Healthpeak for $312M.

Harrison Street also said it is selling a 14-property medical office portfolio totaling 833K SF for $371M. The properties, which are in Virginia, Illinois, Minnesota, New Jersey, Oregon, Texas and California, are held by Harrison Street’s core fund and U.S. opportunity funds.

 

Source: Bisnow

Health Care-Centric, Mixed-Use Development In Fort Myers, Florida, Gains Traction With Land Deals

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More than three years after Hope Hospice and Community Services Inc. unveiled plans for a 46-acre, health care-centric development in Fort Myers, the mixed-use project has gained significant traction.

And with a trio of recent land deals involving more than one quarter of the total project, only five acres of Hope Preserve remain uncommitted. The three recent parcel sales, which sold for a combined $8.72 million, will result in three new medical office and physicians practices and a traditional office building.

Together, the new projects will contain 148,000 square feet of new commercial space. One of the new buildings, a two-story, 21,000-square-foot office building, will become the corporate headquarters for Stevens Construction Inc.

“Hope Preserve will allow us to be more central to all the areas that we serve,” says Mark Stevens, the company’s president. “And it’ll be a much more visible location for us. We’ve been in the same location for 16 years, and we love it there, but this was just a tremendous opportunity.”

The new 14541 Hope Center Loop quarters, which Stevens will own, will double its office footprint to 10,000 square feet. The balance of the space in the building will be marketed for lease by Fort Myers-based commercial real estate brokerage firm LSI Cos. Inc.

“The company plans to complete the building around the end of this year,” said Stevens.

Designed by Southview Studios, Stevens’ new offices will also contain a training room, indoor and outdoor team lounges, multiple bathrooms and a shower facility, conferences and offices that feature floor-to-ceiling glass.

Meanwhile, a second, medical office building also is slated for the 3.71-acre parcel that Stevens acquired for $2.1 million. There, Stevens intends to develop a 27,000-square-foot building. Completion is scheduled for late Spring of 2022. Radiology Regional has committed to lease the two-story building’s first floor, with LSI marketing the second floor.

Additionally, following its own $4.88 million land deal for 7.06 acres, Orthopedics Specialists of Southwest Florida intends to develop a building between 60,000 square feet and 80,000 square feet in Hope Preserve. Stevens is on tap to construct that building, as well, beginning sometime next year.

The final perimeter parcel of the project, at the intersection of Metro Parkway and Ben C. Pratt/6 Mile Cypress Parkway, was sold in mid-May to Hodges Mantz Properties LLC, an entity formed by a pair of Southwest Florida physicians.

Hodges Mantz paid $1.74 million for a 2.5-acre tract, which is zoned for a medical use, in Hope Preserve. LSI Cos. President Justin Thibaut and agent Christi Pritchett represented Hope Hospice, while VIP Realty Group’s Jack Liptak negotiated for the buyer.

The planned new buildings join The Preserve, a continuing care retirement community with assisted living, skilled nursing and memory care units, at Hope Preserve.

Thibaut notes that with the activity, only 5.1 acres remain available within Hope Preserve. Owner Hope Hospice, which acquired the property in 2010, also is likely to build a hospice house on the site eventually. The end-of-life, nonprofit provider today care for roughly 4,000 people daily.

At least one restaurant and a 124-key hotel also are planned for Hope Preserve. The hotel replaces 92 apartments that were originally envisioned for the development.

All of the activity comes as Gulf Coast Regional Medical Center is completing a $315 million, 275-bed expansion less than a mile away. Thibaut expects the hospital expansion’s draw to only intensify when it opens in the coming months.

“Hope Preserve is in a prime position for users who are looking to be near a major medical center,” Thibaut says. “There’s really been a resurgence of medical office users to areas where retailers traditionally would go.”

Stevens believes his growing firm and the growth at Hope Preserve will dovetail nicely. The company, which operates four offices in Fort Myers, Sarasota, Tampa and Orlando and specializes in health care and hospitality projects, currently has 39 separate projects under construction valued at $94 million, with another $152 million set to begin within the next year.

“The market in Southwest Florida is growing, and with projects that are in many cases are larger in scale and scope than ever before,” Stevens says. “That’s been especially good for us and allowed us to grow right on the targeted pace we’d set a couple of years ago. And with Hope Preserve, we’re just super excited to be on the ground floor of such a dynamic project.”

 

Source: Business Observer

With Medical Office Buildings In Short Supply, Investors Are Widening Their Nets

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Although most healthcare real estate (HRE) professionals seem to agree that the fundamentals of the business haven’t changed much due to COVID-19, the pandemic seems to have accelerated at least one previous trend.

Investors appear increasingly willing to buy in HRE product types other than only medical office buildings (MOBs).

“Healthcare real estate used to basically mean medical office buildings,” said Philip J. “PJ” Camp, managing director with New York-based Hammond Hanlon Camp (H2), a healthcare investment banking and advisory firm. “But along the way it got expanded to mean seniors housing and long-term care, and now, I think, and this is being increased as a result of COVID. It’s further expanded to include post-acute care, behavioral health, inpatient rehabilitation facilities (IRFs) and others.”

Why the broadened focus in a post-pandemic world? Simply put, there just aren’t enough MOBs to go around.

A growing number of investors, including those with very deep pockets, have become interested in acquiring MOBs. That has created such strong demand for the product type that capitalization (cap) rates, or first-year estimated returns, are being compressed to historic lows.

“There’s been an awful lot of capital raised to invest in healthcare real estate,” Mr. Camp added, “and that capital has to go to work. And we’re seeing the demand for medical office buildings coming from a wide variety of investors, including a lot of private equity firms and the REITs (real estate investment trusts), which, by and large, have seen their stock prices recover” since the so-called COVID Crash of February to April 2020.”

 

Source: HREI