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Kaufman Hall Selected Financial Advisor To Securing Debt Financing Of Nine Building MOB Portfolio Located In Florida And Georgia

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Kaufman Hall & Associates, LLC (“Kaufman Hall”) was selected as the exclusive financial advisor to AW Property Co. (“AW”) related to securing debt financing for the acquisition of a nine-building, 348,416 square foot medical office portfolio located in Georgia (“Georgia Portfolio”) and a previously acquired two-building, 33,154 square foot medical office asset unencumbered by debt located in Florida (“Florida Asset”).

The eleven on- and off-campus medical office buildings spanning 381,570 square feet are a mix of core, core-plus, and value-add assets.  Much of the Georgia Portfolio is affiliated with a dominant, physician-owned, multi-specialty clinic in the region. AW acquired the Georgia Portfolio on an off-market basis through an existing relationship.

Kaufman Hall’s Role

On behalf of AW, Kaufman Hall undertook a competitive process to secure debt financing for the Georgia Portfolio and the Florida Asset.  Kaufman Hall approached a diverse pool of debt providers that had prior medical office building experience or were seeking entry into the sector.  Based on Kaufman Hall’s efforts, AW’s track record, and the quality of the opportunity, attractive proposals were received from debt providers, despite a challenging capital markets environment. Ultimately, AW selected a well-established national commercial bank as the lender.

About the Companies Involved

Kaufman Hall

For more than 30 years, Kaufman Hall has provided independent, objective insights to assist clients in fulfilling their missions, achieving their goals, and tackling their toughest problems. Kaufman Hall’s real estate practice provides transaction advisory services to many of the nation’s top healthcare providers and developers/investors of healthcare real estate. Kaufman Hall’s focused model provides clients with an unmatched level of relevant experience & independent transaction analysis, structuring and execution capabilities. Kaufman Hall’s real estate practice was launched in 2021 through the acquisition of Healthcare Real Estate Capital (HRE Capital). Providing both consultative and transaction-oriented services, including asset/portfolio joint venture structuring, recapitalizations, dispositions and other related real estate advisory services, the real estate practice has been involved with more than $15 billion of sector-specific real estate transactions across the United States since 2008.

AW Property Co.

AW is a real estate investment and operating company that specializes in medical office buildings in major markets throughout the Southeast United States.  Since 2005, AW has sponsored healthcare real estate investments with an aggregate market value of $800 million, constituting 3.3 million square feet of rentable space in fourteen distinct submarkets.  Headquartered in in North Palm Beach with regional offices throughout the Southeast, AW has a highly dedicated, customer-focused team of professionals with expertise in all facets of real estate acquisitions, redevelopment, finance, operations and asset management.

 

Source: HREI

Return Of In-Person Appointments Is Spurring Medical Office Demand In South Florida

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As in-person medical appointments resume, the demand for medical office space for the aging population in South Florida has enhanced.

At the beginning of the pandemic, medical offices weathered the downturn better than traditional offices, but as new COVID-19 variants emerge and appointments continue, there is strong tenant demand.

According to the 2022 U.S. Medical Office National Report, the medical office vacancy rose 80 basis points to 9.5% in 2020, less than a third of the jump that was seen in traditional offices.

Late last year is when availability started to get tighter, benefiting rent growth. The report says the average asking rate national was $22 per square foot, which is up more than 4% since the end of 2019.

In Palm Beach, JLL Capital Markets recently closed the sale of a two-building medical office plaza in Boynton Beach. Although the price of the sale is unknown, the average rental price is $21.50 per square foot.

Woolbright Medical Plaza, located at 1700 and 1800 Woolbright Road, consists of two institutional-grade medical office buildings totaling 33,151 square feet.

JLL represented the seller, TopMed Realty, a private equity firm in Hallandale Beach, in the sale to AW Property Company, a real estate investment, and operating company in Palm Beach Gardens.

A surging population and large concentration of senior citizens in Palm Beach County are driving the demand for health care services. The medical center is adjacent to a 55+ community with 1,800 single-family homes and 500 apartments called Leisureville.

The building is also near Baptist Health Bethesda Hospital East, a 401-bed building and one of the largest health systems in South Florida. JLL Capital Markets closed the sale of the two-building Woolbright Medical Plaza in Boynton Beach.

TopMed rebranded Woolbright Medical Plaza from an office complex to a medical office plaza. It went from 63% to 93% leased. Tenants include physician groups providing radiology and imaging, ENT, primary care, dentistry and physical therapy services.

 

Source: DBR