National Real Estate Advisors And Catalyst Healthcare Acquire Two Medical Office Building Portfolios For $420 Million

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Months after forming a $1.5 billion strategic partnership to invest in healthcare real estate across the United States, National Real Estate Advisors LLC and Catalyst Healthcare Real Estate have purchased two multi-state portfolios for $420 million.

The portfolios are 92 percent leased and consist of 40 properties totaling 1.2 million square feet spanning 13 states. Most of the assets are medical office buildings and 88 percent of the total leased space is comprised of health systems and regional physician groups. They were acquired from different unidentified sellers in transactions that closed this month and in December.

The properties are located in: Alabama, Arkansas, Connecticut, Florida, Georgia, Illinois, Indiana, Louisiana, Massachusetts, North Carolina, Tennessee, Texas and Florida.

In a prepared statement, Jeffrey Kanne, president and CEO of National said: “The acquisitions significantly scale the investment manager’s medical office portfolio and furthers its geographic diversification. The transactions also underscore National’s commitment to invest in highly competitive, diverse markets for its clients.”

National’s investment portfolios include apartment, office, mixed-use, medical, industrial, data centers and hotel assets. In December 2020, National was part of joint venture that sold the majority ownership interest in a three-building, 620,000-square foot life sciences campus in Cambridge, Mass., for $720 million.

Alabama, Arkansas, Connecticut, Florida, Louisiana, Tennessee and Virginia are new MOB markets for National. One of the assets acquired is Physicians Regional Pine Ridge multi-tenant medical office building, a 108,337-square-foot MOB property in Naples, Florida.

New Joint Venture

In prepared remarks, Chad Henderson, founder and CEO of Catalyst, a national, full-service healthcare real estate investment firm, said: “The closing of the portfolios was a significant first step for the joint venture. Formed in early November, the venture strives to positively impact healthcare delivery by investing strategic capital with a partnership-like mentality. The transactions further Catalyst’s commitment to build on meaningful relationships within healthcare.

When National and Catalyst announced the joint venture on Nov. 2, the partners said they had already closed on three to-be-developed assets and expected more deals to close by the end of 2021. The first three joint venture developments were: a 74,640-square-foot in-patient rehab facility for PAM Health in Miamisburg, Ohio, with 42 in-patient rehabilitation beds and 20 long-term care beds; a 51,500-square-foot inpatient rehab facility for PAM Health in Venice, Florida, with 42 in-patient rehabilitation beds; and a 23,700-square-foot medical office building for Dupont Hospital in Fort Wayne, Indiana.

 

Source: Commercial Property Executive

Newmark Arranges Disposition Of 15-MOB Portfolio Across Seven High-Growth Sunbelt States And Facilitates Acquisition Financing For The Assets

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Newmark announed it has facilitated the sale of the Southern Core Medical Office Portfolio, a 15-building, approximately 400,000-square-foot medical office building portfolio located across seven Sunbelt states.

Newmark Executive Managing Director Ben Appel, Senior Managing Directors Jay Miele and Michael Greeley and Managing Director John Nero of Newmark’s Healthcare Capital Markets Group represented the seller, Montecito Medical, and advised the buyer, KKR Real Estate Select Trust Inc. (KREST) on debt financing which was provided by BMO Harris Healthcare Real Estate Finance.

“This acquisition provides instant scale across high-growth Sunbelt markets, making it an attractive first investment in core healthcare real estate assets for KREST,” said Appel. “With Montecito Medical retaining its interest in and operational responsibility for the portfolio, this investment is able to provide long-term, stable income for its new ownership while aligning with Montecito Medical’s operational expertise in the healthcare sector.”

The portfolio comprises 15 outpatient medical office buildings and ambulatory surgery centers located across the southern United States in growth submarkets within Arkansas, Florida, Georgia, North Carolina, Tennessee, Texas and South Carolina. The portfolio is over 99% leased to a mix of leading investment-grade health systems and specialist medical groups in practice areas including gastroenterology, nephrology, orthopedics, ophthalmology and urology.

Newmark’s Healthcare Capital Markets group worked in partnership with the firm’s Debt and Structured Finance practice to arrange portfolio financing for the acquirer.

“We appreciate the opportunity to support KREST on this important portfolio financing, which was well received by the lender market given the portfolio’s attractive investment fundamentals and quality provider tenancy,” said John Nero, Managing Director.

 

Source: HREI

Harrison Street Acquires Portfolio Of Eleven Medical Office Buildings In Six States

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Ryan Cos. has completed the disposition of an 11-building medical office portfolio encompassing 500,778 square feet throughout Florida, Illinois, Minnesota, North Carolina, North Dakota and Wisconsin.

Harrison Street Real Estate Capital acquired the portfolio, while Ryan Cos.’ healthcare real estate management arm will continue to offer operations services. Newmark’s Healthcare Capital Markets Group represented the seller.

The portfolio includes the 24,000-square-foot Surgery Partners Valley Ambulatory Surgery Center in Saint Charles, Ill., along with a multi-use integrated service center, among others. Completed in 2019, the Saint Charles asset at 2475 Dean St. traded for $13.9 million, according to Kane County records.

The portfolio sale succeeded another medical office transaction between Ryan Cos. and Harrison Street. Last week, the latter acquired three medical facilities across suburban Milwaukee from Ryan Cos. for a total of $92.6 million, according to the Milwaukee Business Journal. The trio of assets is currently leased to The Froedtert & the Medical College of Wisconsin and Children’s Hospital of Wisconsin.

A Cross-Sector Developer

Over the past five years, Ryan Cos. has completed more than 3.1 million square feet of medical facilities nationwide, but the developer is also active across other sectors. Last July, the company teamed up with DWS Group to develop Confluence at Mesa Gateway, a speculative industrial project totaling more than 515,000 square feet in Mesa, Ariz. The six-building industrial park is slated for a mid-2022 completion.

Ryan Cos. is also on track to break ground on a 400,000-square-foot Class AA office tower in Plano, Texas. The 24-story building is already 50 percent preleased to Ryan LLC, a tax services, software and technology firm. The office tower is scheduled for completion in early 2024.

 

Source: Commercial Property Executive