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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

Davis Launches MOB Investment Fund With Eight Acquisitions In Transactions Totaling $194 Million

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 Minneapolis-based Davis has kicked off its new medical real estate investment fund with a series of thirteen transactions totaling 536,362 square feet and $194 million in value.

Davis Medical Investors, LLC closed on the acquisitions of eight medical office buildings (MOBs) totaling 309,735 square feet during the first two weeks of December for a total of $112 million. Three of the properties were sold into the fund from existing Davis-affiliated partnerships and five were newly acquired from third parties.

“This is just the start of what we expect will be a fund of 20+ medical office buildings totaling up to $240 million,” says Mark Davis, Founder and Managing Partner of the national healthcare real estate development, property management, brokerage and investment firm. “We are looking for $125 million of medical building acquisitions in 2021, and we’re highly motivated, flexible and quick in closing on these assets.”

Stewart Davis, Davis Executive Vice President – Investments, said,  “These facilities fit our MOB acquisition criteria to a “T” in terms of deal size, type of property and tenancy, occupancy level, market, and location. In addition, as these acquisitions are growing our portfolio of assets, they are also growing our property management portfolio. These transactions are the culmination of many months of hard work. Despite some of the acquisitions being temporarily put-on hiatus because of COVID-19, we stayed in close contact with the sellers to ensure we successfully brought these deals to fruition.”

The eight properties are in Tennessee (three), Minnesota (three), Ohio and Connecticut. The Tennessee and Connecticut acquisitions are the firm’s first in those states. The portfolio includes all Class A and Class B+ off-campus assets that have an average building age of 10 years. They house a diverse mix of tenants with a stable overall occupancy of 99 percent and a weighted average lease term of more than eight years.

The properties are:

• Hartmann MOB, Tenn., 50,951 s.f., 93% leased
• Smyrna MOB, Tenn., 37,566 s.f., 96% leased
• Crossings MOB, Tenn., 38,852 s.f., 100% leased
• M Health-Fairview, Minn., 18,672 s.f., 100% leased
• Cornerstone MOB, Minn., 52,904 s.f., 100% leased
• Midwest ENT – Vadnais Heights, Minn., 12,000, 100% leased
• The Urology Group MOB, Ohio, 55,000 s.f., 100% leased
• EastPoint MOB, Conn., 43,790 s.f., 100% leased

The capital behind the new Davis Medical Investors Fund included long-time Davis partners as well as the participation of a strong Davis institutional partner. Capital One is providing the financing for the new Fund.    

“Capital One is pleased to expand our relationship with Davis on the transaction, which provides them with room to grow. We are excited to continue to work with this excellent borrower now and in the future,” says Erik Tellefson, Managing Director, Capital One.

“Davis is an existing Capital One borrower and it is phenomenal to close this credit facility with them. We have big plans with them from a lending standpoint,” says Natalie Sproull, Senior Director, Capital One.

About Davis

Davis, founded in 1986, is a national healthcare real estate firm that offers unparalleled expertise in healthcare real estate development, property management, brokerage, investment and consulting services to health systems, hospitals, individual medical groups, specialty practices and other healthcare organizations. Over the past five years, the company has developed 31 Class A medical buildings totaling $300-plus million in development costs and completed 43 investment transactions totaling more than $700 million. It has also negotiated more than 300 healthcare property leases totaling 1.5 million square feet during that time. For more information, visit www.davishre.com.

For more information about the firm’s MOB acquisition criteria, visit https://www.davishre.com/wp-content/uploads/2020/12/Investment_criteria_7.pdf.

 

Source: HREI