Borrowers And Lenders Are Adapting To The Hot Heathcare Real Estate Market

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When it comes to financing medical office building (MOB) acquisitions, the cost of capital is not always the most important factor in choosing a lender.

“In fact, when a nine-property MOB portfolio in the Atlanta area changed hands in a sale-leaseback transaction in late 2019, the borrower on the $25 million loan chose to go with a lender that did not have the lowest cost but that knew the tenant best so that they could make sure that everything would go quickly through due diligence and get to closing and not hit any bumps along the way,” said Sabrina Solomiany, a first VP, US Healthcare Capital Markets Debt & Structured Finance with CBRE Group Inc. (NYSE: CBRE), who helped line up the debt for the buyer. “It was very competitive, but ultimately we went with Synovus, with part of the reason being that even though they did not necessarily have the most competitive terms, they actually had a banking relationship with the physician group.”

Ms. Solomiany made her remarks during the recent Revista Medical Real Estate Investment Forum 2020, held Jan. 27-29 at PGA National Resort & Spa in Palm Beach Gardens, Florida. She was part of a panel session titled, “Debt Outside the Box: Construction, Mezz & Alternative Asset Classes.” Joining Ms. Solomiany on the panel were: Natalie Sproull, VP with Capital One (NYSE: COF), as moderator; Jim Barnes, director of Healthcare Specialty Lending with Synovus Financial Corp. (NYSE: SNV); and Andrew Smith, managing director with Los Angeles-based Kayne Anderson Capital Advisors LP.

During the session, the panelists discussed some of the latest trends in healthcare real estate (HRE) financing when it comes to acquisitions as well as development deals. Part of the discussion focused on how and why certain HRE deals get done.

“When it comes to construction financing of medical projects, people are often surprised that the first few things I consider are not always financial in nature, said Mr. Barnes of Columbus, Ga.-based Synovous. “I like to look more at the expertise of the developer,” he said, “making sure that the developer really has a deep experience in delivering medical properties on time and within budget. This has become much more important recently with the trend toward greater institutional equity investment and, for the most part, the institutional investors having much less expertise in construction than the developers. Secondly, the firm looks for strong sponsorship either from a hospital system or a longstanding, stabilized private practice – something that will create an anchor within the property.”

 

Source: HREI

700-Foot Vertical Medical City Being Planned On Biscayne Boulevard, Valued At $2.1B

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An Orlando company submitted plans to the Federal Aviation Administration last week for a 700-foot downtown Miami project called Vertical Medical City Biscayne.

The application was filed on January 22. According to the application, the project will be built in the 1600 block of Biscayne Boulevard. Construction is scheduled to begin in January 2021.

An affiliate of Ponte Health Properties, LLC is the developer. A press release from Ponte in October 2019 said that Vertical Medical City Biscayne will be built in the Bayfront Park vicinity in downtown Miami. The project will be valued at $2.1 billion and include 90+ stories of development, the release said.

Ponte is also planning similar projects in Orlando and Chicago. All Vertical Medical City locations are planned to include residential Independent Living, Memory Care Units, Urgent Care, Medical Office and Outpatient Surgery and Services Spaces, Urban Farming, and Research and Development spaces as part of a complex mixed-used geriatric-focused project, according to Ponte.

Source: The Next MIami

Orlando Health To Buy Land Near Lakeland For Medical Campus, Hotel, And More

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Orlando Health has a contract to buy about 80 acres on the south side of Lakeland for a potential future medical campus that eventually will include up to a 360-bed hospital.

It also will feature medical office space, a small hotel and limited supporting retail, which will be built out in phases as part of a long-term plan.

Executives with the nonprofit health care organization and network of community-based hospitals said plans for the property, the first phase of which is not expected to be built for several years, are still under development, and Orlando Health will research and seek community input to ensure the eventual Orlando Health Lakeland Health & Wellness campus meets the needs of Lakeland and nearby communities in Polk County.

“Serving Polk County has been a part of our long-term growth plan for years,” said Matt Taylor, vice president of asset strategy with Orlando Health, in a prepared statement.

Sanlan RV & Golf Resort Inc. owner Edward Holloway is the seller of the vacant property that’s in an unincorporated part of the county, just south of the Polk Parkway on the east side of Lakeland Highlands Road. Orlando Health has applied for annexation of the land by the city and for changes to the comprehensive land-use plan and zoning. While Orlando Health executives do not expect traffic associated with the project to significantly impact the area, a new traffic study will be part of the process.

“Our planning is in the very early stages,” said Taylor. “We intend to take our time and be very thoughtful. We will become involved in the community at different levels, including community meetings, civic groups and a public website. When we are ready to move forward, we want to ensure we are meeting the needs of the community.”

 Orlando Health, AdventHealth and Nashville, Tennessee-based HCA Healthcare Inc. (NYSE: HCA) all have projects that are part of $525.1 million in facilities that will be completed this year.

Expansion projects like the new hospitals — which create temporary construction positions and full-time medical jobs — allow health care facilities to expand into new territories where they don’t already offer services. Meanwhile, area hospitals also are wrapping up construction work on new medical office buildings, freestanding emergency rooms and expansions to their current facilities that add beds or other services.

Orlando Health is a $3.8 billion health care organization with hospitals, physician practices and outpatient care centers across Central Florida. The organization is home to the area’s only Level One Trauma Centers for adults and pediatrics, and it is a teaching hospital system. More than 3,100 physicians have privileges across the system, which is also one of the area’s largest employers with more than 20,200 employees who serve more than 167,000 inpatients, more than 2.7 million outpatients, and more than 20,000 international patients each year.

Central Florida expansion is the name of the game for hospital companies in 2020. Click here for the Orlando Business Journal slideshow ‘14 Central Florida Medical Projects Set To Open In 2020‘.

 

Source: Orlando Business Journal