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New Health Care Real Estate-Focused REIT Plans To Deploy $2 Billion Over Next 36-48 Months

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Since its founding in 2004 as an acquirer and developer of student housing properties, Chicago-based CA Ventures LLC has branched out into other property types, including residential, industrial and senior housing.

Over the years, the firm that was originally known as Campus Acquisition – the “CA” in CA Ventures – grew into what it calls a “global, vertically integrated real estate investment management company with more than $13 billion of assets across North America, South America and Europe.”

In early 2020, the investment firm made its move into healthcare real estate (HRE) with the launching of a medical office and life science division.

In recent months, the company announced that the healthcare division had evolved into a new entity, CA Health and Science Trust Inc. (CAHST), a private real estate investment trust (REIT) focused on acquiring and developing value-add and core-plus medical office and life science facilities across the country.

Leading the private REIT are: as president, Russell Brenner, a 24-year commercial real estate (CRE) veteran with a strong background in acquiring and developing medical office buildings (MOBs) and ambulatory surgery centers (ASCs); and, as chief investment officer, Jesse Ostrow, also a CRE veteran with a strong background in real estate private equity, investment banking and consulting.

The two executives were previously with well-known Chicago-based HRE firms, as Mr. Brenner was a partner from 2012 to 2019 with Stage Equity Partners and Mr. Ostrow was the chief investment officer with MedProperties Group, a medical real estate investment, development and operating platform. He was with the firm from 2011 to 2018.

In announcing the launching of CAHST in September, the REIT also announced an initial equity commitment of up to $245 million from three partners; New York-based Davidson Kempner Capital Management LP, New York-based Monarch Alternative Capital LP and CA Ventures.

The new REIT has certainly gotten off to a fast start.

According to Mr. Brenner: “The REIT plans additional follow-on equity raises in the coming 24 months. With leverage, we will seek to deploy roughly $2 billion over the next 36 to 48 months.”

 

Source: HREI

KKR Forms JV To Target $1B In Healthcare Real Estate

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Global investment firm KKR has formed a joint venture with Cornerstone Companies, a healthcare real estate investment, development and management firm, to acquire and develop a portfolio of healthcare properties across the United States.

KKR and Cornerstone have seeded the portfolio with the recapitalization of 25 healthcare properties owned by Cornerstone. With funding commitments provided by KKR’s real estate and credit funds and Cornerstone, the Joint Venture is positioned to acquire more than $1 billion in real estate assets over the next few years.

The portfolio recapitalized by KKR and Cornerstone includes 713,705 square feet of medical office buildings and ambulatory surgery centers located across 12 states, with in place long-term leases to a high quality group of healthcare systems, physician group practices and surgery center operators. Cornerstone and KKR will work together to grow the portfolio through acquisitions and net lease development opportunities, with a focus primarily on long-term leased single-tenant medical office buildings, ambulatory surgery centers and facility-based outpatient healthcare assets.

“KKR is one of the world’s largest investment firms with incredible connectivity across industries, including deep experience investing in the healthcare and real estate sectors,” said Tag Birge, President and CEO of Cornerstone. “This strategic partnership significantly increases our reach and capacity to deliver investment and development solutions for leading physician groups and health systems. We are very excited to work with a partner in KKR who shares our commitment to lasting client relationships and strong focus on portfolio construction and underwriting.”

“We are pleased to collaborate with the highly-regarded team of industry specialists at Cornerstone to invest in a scaled portfolio of healthcare properties,” said Peter Sundheim, Director at KKR. “The recapitalization of 25 well-situated seed assets creates a strong foundation for our Joint Venture.”

“We will contribute capabilities from across KKR’s real estate, credit and healthcare industry teams to support sourcing and underwriting of assets for the Joint Venture,” said Michelle Hour, Director at KKR. “As investors in the healthcare sector for more than two decades, our relationships and understanding of the needs of tenants will help us to provide attractive ownership for their mission-critical real estate.”

Additional financial terms of the Joint Venture and recapitalization transaction were not disclosed.

Newmark’s Healthcare Capital Markets Group advised Cornerstone and KKR on establishing the Joint Venture, represented Cornerstone on the portfolio recapitalization transaction, and provided advice to KKR on debt financing. CBRE’s Healthcare and Life Sciences Capital Markets Group provided buyside advisory services to KKR on the portfolio recapitalization transaction. Simpson Thacher & Bartlett LLP acted as legal counsel to KKR.

 

Source: Real Estate Weekly