Real Capital Solutions Buys 404,000 SF Medtronic Campus Near Boulder For $188M

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Real Capital Solutions (RCS), a Louisville, Colo.-based real estate investment and management firm, announced that it has acquired the newly completed, two-building, 404,149 square foot life sciences campus of the global medical device company Medtronic in Lafayette, Colo., about 12 miles east of Boulder.

RCS has confirmed to local news media that the purchase price was $188 million. The previous owner and presumed seller of the real estate was Ryan Lafayette LLC, a partnership associated with the developer, Minneapolis-based Ryan Companies US Inc.

The single-tenant, net-leased asset includes two connected five-story buildings at 200 and 250 Medtronic Drive, near the intersection of U.S. Highway 287 and Northwest Parkway, at the southernmost edge of Lafayette. Medtronic has a 20-year lease on the build-to-suit facilities.

Adam Abeln, chief acquisitions officer for RCS, said the Medtronic Lafayette Campus deal was the largest acquisition in the firm’s 40-year history. He also said RCS has done multiple deals with Ryan Companies over the years and had monitored the development of the campus.

“What interests us about Medtronic was just the credit quality, the name, the fact that they’re the world’s largest medical device producer and the fact that it fits within our strategy today,” Mr. Abeln told the Business Journal, adding that Medtronic’s long-term lease on the property made it an attractive deal in an uncertain real estate market.

RCS Plans To Keep Buying

Mr. Abeln also told local media that the firm plans to keep buying.

“Near-term, we believe commercial real estate values, especially in multifamily and office, will fall and defaults will rise,” Mr. Abeln told Colorado Biz. “The next six to 18 months will be tough for many owners, particularly those who will need to refinance. We have strong relationships with lenders and plan to be major buyers, especially here in Colorado.”

He added that RCS has been positioning itself for this downturn for some time, selling much of its at-risk portfolio, amassing cash, and investing in similar high-credit, STNL deals for itself and other ultra-high-net-worth families who are concerned about capital preservation.

However, Mr. Abeln told the Business Journal that RCS plans to adjust its strategy by pursuing more “value-add, opportunistic” multifamily, office, retail and industrial deals, rather than focusing solely on “safe” STNL properties.

According to its website, RCS “is a highly entrepreneurial real estate company that invests smart capital and provides practical solutions for real estate opportunities. For over 30 years, RCS has achieved great success investing in entrepreneurial real estate ventures.”

During that time, the firm says, it has acquired and managed more than 370 real estate assets, totaling about $3.5 billion in acquisition value. It currently owns 70 properties with more than $2 billion in assets under management (AUM).

Plans Call For Additional Development

The site plan for the Medtronic Lafayette Campus, which was approved by city officials in March 2021, included a potential second phase of the project that would include a third five-story building and a three-level parking structure. That future project could boost the size of the campus to nearly 600,000 square feet, with total employment of about 2,000. The timetable for the phase two development has not been disclosed.

Before selecting the Lafayette campus, Medtronic reportedly considered sites in Minnesota and Texas, as well as the possibility of expanding to the former StorageTek campus, now called Redtail Ridge, in Louisville.

Ryan Companies and Medtronic broke ground for the Lafayette campus in June 2021. At the time, Medtronic said it planned to invest $200 million in the new campus, which would create 1,100 jobs and unite employees from its other Colorado facilities.

At the time, Medtronic noted that it had maintained a presence in Colorado for almost 50 years, with facilities in Boulder and Louisville, and employed about 2,300 people across the state. The firm said it would maintain manufacturing operations in Boulder and Louisville, and shift R&D work to the new Lafayette campus, which would include about 60,000 square feet of R&D space, along with some administrative functions.

When ground was broken, Medtronic Chairman and CEO Geoff Martha said, “Medtronic medical technology developed and manufactured in Colorado transforms patient care globally, and we anticipate continued innovation at our new Lafayette campus. We look forward to coming together at a single campus to bolster our presence in Colorado and position ourselves for growth. In addition, we are investing in this innovation center and new campus to attract and retain technology talent in this tech-rich region of Colorado.”

Colorado officials also welcomed the construction project and the ongoing boost the campus would give the local economy, particularly coming on the heels of the downturn associated with the COVID-19 pandemic.

“We’re thrilled with Medtronic’s investment in Colorado,” the state Chief Economic Recovery Officer and Executive Director Pat Meyers said at the time. “This new campus will allow for good jobs, innovation, and employee wellness, all of which are critical to powering the Colorado Comeback.”

Medtronic, whose U.S. headquarters is in Minneapolis, is owned by Dublin, Ireland-based Covidien, a global healthcare products and medical device manufacturer. According to a news release from Medtronic, the 42.2-acre Lafayette campus is its second largest in the United States. The firm says it has sites in more than 350 locations in more than 150 countries.

 

Source: HREI

Baptist Health And The Miami Dolphins Announce The Opening Of New Orthopedic Complex

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Baptist Health is pleased to announce the opening of its new, state-of-the-art orthopedic complex across the street from Hard Rock Stadium, home of the Miami Dolphins.

Serving Dolphins players and the public alike, the new location offers comprehensive orthopedic care with a full range of diagnostic imaging, physical therapy and rehabilitation services all under one roof.

The expansive, 17,000-square-foot facility is located adjacent to the Baptist Health Training Complex, the Dolphins’ training facility, with clinical areas overlooking the team’s practice field. The new location will provide the public with high-quality orthopedic care, featuring cutting-edge technology and renowned Baptist Health medical experts.

“This new facility serves as a symbol of Baptist Health’s dedication to both our community and our partnership with the Miami Dolphins,” said Javier Hernandez-Lichtl, CEO of Baptist Health’s Doctors Hospital and Baptist Health Orthopedic Institute. “With its ideal central location, the orthopedic complex will provide even more members of the community with our trusted care, and we look forward to inviting our patients in.”

The new orthopedic complex commemorates the decades-long relationship between the Miami Dolphins and Baptist Health, which serves as the Official Medical Team and Official Wellness and Sports Medicine Provider for the team. In July 2023, the two entities celebrated the two-year anniversary of the unveiling of the Baptist Health Training Complex where the team, coaching staff and football support staff are headquartered year-round.

“We are excited for the community to ‘go where the pros go’ and experience the same level of expertise we provide the exceptional athletes of the Miami Dolphins,” said John Uribe, M.D., orthopedic surgeon and Chief Medical Executive with Baptist Health Orthopedic Care and head team physician of the Miami Dolphins. “This orthopedic complex is the pinnacle of medical expertise, advanced treatment options and expedient care for all patients.”

 

“Baptist Health has been an incredible partner for many years, and it’s a privilege for us to join them in serving both our community and the players alike by bringing this world-class facility to our backyard,” said Jeremy Walls, Chief Revenue Officer of the Miami Dolphins and Hard Rock Stadium. “We’re excited that the public will be able to step foot on our campus and experience the same standard of care as our team in this new, innovative space.”

Baptist Health is also a proud partner of the Miami Dolphins Foundation, working together on a series of initiatives around the health and safety of South Florida students, coaches and parents to grow youth football participation in the region.

The orthopedic complex will begin seeing patients on August,14 at 19955 NW 27th Avenue, Suite 200, Miami Gardens. The entrance to the facility can be found at Gate 11, located on NW 27th Avenue between 199th Street and 203rd Street. Patients must have an appointment to receive care.​

 

Source: South Florida Hospital News

Healthcare Mergers: Expecting More In 2024

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Even with some high-profile hospital deals taking place in the first half of the year, merger activity across the broader healthcare industry has slowed a bit.

And KPMG is projecting that healthcare mergers and acquisition activity may be a bit more subdued for the remainder of the year. In the first half of 2023, there were 245 healthcare mergers, a 7% drop from the first six months of 2022, according to a report from KPMG.

“The pace of healthcare deals may not pick up more steam until 2024,” says Ross Nelson, KPMG’s national healthcare strategy leader for the provider and payer sectors. “We do think it’s going to pick up soon. I don’t know the exact date, but we’re hopeful that calendar year ’24 is certainly going to be more robust than the calendar year ’23.”

There have been some big healthcare transactions taking place in the beginning of the year, including CVS buying Oak Street Health in a $10.6 billion deal. UnitedHealth is purchasing Amedisys, the home health and hospice provider, in a $3.3 billion transaction. TPG and AmerisourceBergen completed a $2.1 billion deal to acquire OneOncology, a network of cancer practices.

Hospital merger activity is on the rise, and some analysts expect that to continue. In a deal that gained widespread attention, Kaiser Permanente agreed to acquire Geisinger Health, the Pennsylvania system. BJC HealthCare of St. Louis and Saint Luke’s Health System of Kansas City announced May 31 that they plan to merge and form an integrated academic health system. Aspirus Health, a Wisconsin-based system, and St. Luke’s of Duluth, Minn., said in July they plan to come together.

Headwinds And Tailwinds

Even with some big deals that have been announced, Nelson says a number of factors have slowed down some merger activity in the broader healthcare industry.

“The headwinds include higher interest rates, and if the Federal Reserve continues to raise interest rates, some organizations could wait before pursuing M&A plans,” Nelson says.

The Federal Reserve has raised its benchmark interest rate 11 times in the last 17 months, and it’s unclear if other hikes are coming, the Associated Press reports.

“If the nation moves into a recession, then that would likely cool healthcare merger activity,” Nelson says. “Some organizations are paying closer attention to heightened scrutiny from regulators, Nelson says. In some cases, the Federal Trade Commission has been vocal in opposing mergers and acquisitions involving health systems in the same market, drawing criticism from some in the hospital industry.”

Some hospitals have explored mergers with systems in other states to skirt regulatory concerns about the consolidation of providers in the same market.  UnityPoint Health and Presbyterian Healthcare Services said in March that they are exploring a merger, potentially creating an organization with more than 40 hospitals. UnityPoint operates hospitals in Iowa, Illinois and Wisconsin, while Presbyterian serves New Mexico.

“I think folks are looking at deals in other markets because they feel like often, the deals within their markets are having a tough time getting done,” Nelson says. “Even with deals involving organizations in different markets, regulators are taking a closer look.”

Nelson expects to see more hospitals teaming with other health systems or other partners on certain service lines to keep patients in their network.

“With hospitals that have assets that may not be as profitable as they should be, they may look for partners that might unlock revenue or cost synergies and they can share in the cumulative or combined bottom line,” Nelson says.

KPMG expects some of the economic pressures on merger activity to ease, leading to some increased deal-making.

“There is a lot of money on the sidelines that needs to be deployed,” Nelson says.

Some health systems could be looking at selling some hospitals in markets where they don’t have a commanding presence. Steward Health Care agreed to sell five hospitals in Utah to CommonSpirit Health earlier this year. In June, Ascension agreed to transfer Our Lady of Lourdes Memorial Hospital in Binghamton, N.Y., along with its physician practices, to the Guthrie Clinic of Sayre, Pa.

‘Unlock Value Creation’

As more care shifts outside the hospital, organizations could be looking to acquire more outpatient and ambulatory surgical centers. Investors could find opportunities in markets where the bulk of services are still being done inside the hospital, KPMG projects.

“Healthcare organizations considering mergers and acquisitions should think strategically,” Nelson says. “I think they should be continuously giving their portfolio a review of what’s kind of a core and non-core asset, or a performing or non-performing asset, within the existing portfolio.”

Organizations should stay disciplined about the thesis of their deals and valuations.

“You’ll get your chance to buy the right asset at the right price,” Nelson says. “For those that are buying assets, I would constantly look at how to unlock value creation or continue  do integration activities to unlock as much synergies and value as possible.”

Anu Singh, managing director and leader of partnerships, mergers and acquisitions at Kaufman Hall, told Chief Healthcare Executive in July that he expects to see more hospitals making deals in the months ahead.

“There are organizations that are looking for complementary resources and capabilities …  there are ones in the middle who have maybe some increased concerns about their long-term viability of remaining independent,” Singh said.

 

Source: Chief Healthcare Executive