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Remedy, Kayne Anderson Real Estate Acquire Trophy Medical Office Portfolio In Denver Area

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Joint venture partners Remedy Medical Properties and Kayne Anderson Real Estate have acquired a trophy medical office portfolio in the Denver suburb of Englewood.

The acquisition of the two-building, 68,195 square foot Dry Creek Medical Campus closed April 12.

Principals of Chicago-based Remedy and Boca Raton, Fla.-based Kayne Anderson Real Estate – which, aside from hospitals and health systems, are the nation’s largest owners of medical properties – say the acquisition has many upsides and provides their firms with a number of benefits.

“This acquisition gives us the opportunity to invest in a strong, highly coveted market with excellent demographics,” says Joe Magliochetti, Chief Investment Officer of Remedy. “The Denver area is one of America’s fastest growing regions. There are almost 234,000 residents within a five-mile radius of this property, and the population is forecasted to grow 3.4 percent between 2022 and 2027, compared to only 1.2 percent for the United States as a whole.”

The area also boasts an average household income of nearly $159,000, which is 51 percent more than the national average. As home to 10 Fortune 500 companies, the area also has a diverse, thriving economy with a steady influx of highly educated, talented workers.

“The campus location is also ideal, with easy access to local transportation,” Mr. Magliochetti adds. “It’s two blocks from Interstate Highway 25 and the Dry Creek Light Rail Station, and close to two major airports. It’s also within 10 miles of seven major hospitals, including Sky Ridge Medical Center, Littleton Adventist HospitNews Releaal and Centennial Hospital.”

The facilities, located at 135 and 145 Inverness Drive E., are 100 percent leased by six leading healthcare providers with complementary specialties. Services are centered around a full-service ambulatory surgery center (ASC) leased to Orthopedic Centers of Colorado (OCC) in partnership with SCA Health, the national leader in specialty care, which is owned by UnitedHealth Group. Dr. Metz Bariatric Surgery, which is also on the campus, recently became part of HealthOne, one of the leading health systems in Colorado. Other specialties housed in the properties include imaging, spine, orthopedics, anesthesia and dermatology.

“The properties house high-quality, well-respected medical tenants that have average remaining lease terms of almost nine years,” says Antonio Minchella, Senior Managing Director, Medical Office, Kayne Anderson Real Estate. “With average annual net operating income (NOI) growth of 3 percent, the assets will deliver a steady, predictable and growing income stream.”

Mr. Minchella adds that the two properties are relatively new, with the three-story 145 Inverness Drive building built in 2019 and the one-story 135 Inverness Drive facility built in 2000. The one-story building was completely renovated into an orthopedic surgery center in 2021 and now features seven operating rooms, three convalescent care rooms, and pre-op and post-op areas.

“The surgery center has been very successful and active, performing more than 500 surgeries a month, which is among the busiest in the Denver area,” Minchella adds.

CBRE U.S. Healthcare & Life Sciences served as the broker for the transaction.

About Remedy Medical Properties

Remedy Medical Properties is a full-service healthcare real estate company and the largest owner of healthcare properties in the country, with more than 28 million square feet and 25 offices spanning 43 states. For healthcare decision-makers who want to maximize the value of their real estate while enhancing their ability to adapt, our national presence enables us to offer the right solutions in the right locations for your organization. Remedy offers unmatched flexibility in every client engagement, and our adaptability enables us to provide more options in ownership, development, leasing, management, and strategy. Our willingness to commit capital, share more risk, and offer greater foresight results in greater resilience, profitability, and peace of mind for our clients. For more information visit www.RemedyMed.com.

About Kayne Anderson Real Estate

Kayne Anderson Real Estate (“KA Real Estate”) is a leading real estate private equity investor in medical office, senior housing, off-campus student housing, multifamily housing and self-storage. KA Real Estate manages $14.5 billion of real estate AUM across opportunistic equity and real estate debt. KA Real Estate is part of Kayne Anderson Capital Advisors, L.P., a $34 billion alternative investment management firm with more than 38 years of successful experience in the real estate, infrastructure, credit, and growth capital sectors (as of 9/30/2022).

 

Source: HREI

Big Sky Secures $190M Financing For Ten Healthcare Properties Across Four States

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JLL Capital Markets just announced that it has arranged approximately $190 million acquisition financing for ten healthcare properties totaling 857,779 square feet.

JLL worked on behalf of the borrower, Big Sky Medical Real Estate, in securing the five-year, floating-rate loan from a bank syndication led by Capital One Healthcare.

“Despite a challenging environment, our team and JLL persevered and successfully syndicated this loan to close out a successful 2022 for Big Sky’s partnership with GFH,” said Jason L. Signor, founder and CEO of Big Sky Medical. “We value our relationships with Capital One and the syndication group.”

The properties, which are collectively 87% occupied, serve a wide range of healthcare uses, including outpatient medical office buildings, ambulatory surgery centers, diagnostic imaging centers and more. The portfolio includes:

• Pyramids North, 9201 North Central Expressway, Dallas, Texas
• Pyramids South, 9101 North Central Expressway, Dallas, Texas
• Providence Park, 2501 Earl Rudder Freeway, College Station, Texas
• Greenpark MOB, 7515 Main St., Houston, Texas
• Peninsula Orthopedic Associates, 1675 Woodbrooke Dr., Salisbury, Maryland
• Tidal Health Cardiology, 400 Eastern Shore Dr., Salisbury, Maryland
• Pelican Professional Center, 42388 Pelican Professional Park, Hammond, Louisiana
• Texas A&M Health Science Center, 8441 Highway 47 West, College Station, Texas
• Peak Surgical Center, 610 North Coit Road, Richardson, Texas
• Valley Ortho & River Surgical Institute, 609 East Orangeburg Avenue, Modesto, California

JLL’s 2022 Healthcare and Medical Office Perspective highlights that patients are moving to sunbelt states and retirement markets such as Texas, Louisiana and California at exponential rates creating more demand for medical office buildings. As a result, medical office occupancy has ticked upwards as demand intensifies in a moderate construction environment which has gradually increased rents for the 11th quarter in a row.

The JLL Capital Markets team representing the borrower was led by Managing Directors Timothy Joyce and John Chun and Director Anthony Sardo.

“We are thrilled to have the opportunity to work with the Big Sky Medical team to help capitalize this outstanding portfolio of medical office assets in diverse, high growth markets. We would like to thank the lenders for stepping up in a challenging environment and providing a great debt package for these acquisitions,” says Joyce.

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

 

Source: JLL

Remedy And MedProperties Form $350 Million Medical Office Building Joint Venture

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Remedy Medical Properties and MedProperties Realty Advisors LLC formed a $350 million-plus joint venture to recapitalize an 11-state, 23-asset healthcare real estate portfolio totaling more than 1 million square feet owned by MedProperties.

Capital One provided senior debt for the transaction. Terms were not disclosed. The CBRE Healthcare & Life Sciences Capital Markets team marketed the portfolio.

The portfolio contains primarily medical office buildings as well as some post-acute facilities, including a rehabilitation hospital and ambulatory surgery center in Texas and rehabilitation hospital in Ohio. The properties are located in Texas (eight facilities), Florida (two), Pennsylvania (two),  Ohio (two), Kentucky (two) and one each in Tennessee, New York, North Carolina and Missouri.

The properties are located in some of the country’s top metropolitan areas and strategic, secondary markets. The assets are 94 percent occupied and 71 percent leased by high-caliber investment-grade tenants, including leading hospitals and health systems. One of the properties in the portfolio is Founders Square, a 35,000-square-foot medical office building in Naples, Fla., developed in 2020 by MedProperties and Catalyst Healthcare Real Estate.

Investment-grade healthcare tenants include: Baylor Scott & White, Children’s Hospital of Los Angeles, CommonSpirit, Rady Children’s Hospital, U.S. Department of Veterans Affairs, University of Southern California, UF (University of Florida) Health and WVU (West Virginia University) Medicine.

Deal Details

Darryl Freling, managing principal of Dallas-based MedProperties, said in a prepared statement his company aggregated a large number of assets through the years through its various funds and investment partnerships. In fall 2020, the firm’s leadership decided to offer a portfolio of about a two dozen of those properties as a recapitalization investment opportunity rather than an outright sale. He said the offering was taken to market in early 2021 and Remedy emerged as the joint venture partner in summer 2021.

The joint venture enabled Chicago-based Remedy, the nation’s largest owner of medical properties, to acquire a majority interest in another high-quality portfolio that complements its own holdings. Remedy’s properties total more than 26 million square feet across 42 states.

Joe Magliochetti, chief investment officer for Remedy, said in prepared remarks the portfolio is a logical addition to Remedy’s holdings and complements his company’s existing assets in terms of geography and tenancy.

The two companies have transacted smaller deals in the past and Remedy has made previous recapitalization deals with other private equity HRE investors. But this was the first time Remedy had done a transaction of this size with a private equity firm that was also another operator and competitor.

Earlier MOB Deals

In May, Remedy paid $55.2 million for Andover Medical Center, a 69,992-square-foot medical office property in the Boston suburb of Andover, Mass., owned by EverWest Real Estate Investors. The deal nearly doubled Remedy’s metro Boston footprint.

A month earlier, Remedy teamed with Kayne Real Estate Advisors in a joint venture to acquire Gresham Station Medical Plaza, a four-building, 100,419-square-foot medical office campus in Gresham, Ore. The joint venture paid $30.9 million for the Class B asset, according to public records. CommercialEdge data stated the previous owner was Stockdale Capital Partners, which had owned the property since 2017.

In one of its recent deals, MedProperties Fund III acquired a 67,060-square-foot multi-tenant medical office building in Glendale, Calif. The six-story facility is located on the campus of CommonSpirit-affiliated Glendale Memorial Hospital.

 

Source: Commercial Property Executive