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REIT Welltower Still Looking To Acquire Healthcare Realty Trust After $5B Bid Rejected

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Welltower remains interested in making a play for fellow real estate investment trust Healthcare Realty Trust after making an all-cash bid for it earlier this year.

Welltower, a REIT that owns senior housing, medical facilities and medical offices, made a $4.8B all-cash bid for Healthcare Realty Trust in February, The Wall Street Journal reported. The offer came soon after Healthcare Realty agreed to a merger with Healthcare Trust of America.

Welltower offered to pay the $163M termination fee that the Nashville-based Healthcare Realty would’ve had to pay for backing out of the $10B, mostly stock deal, but Healthcare Realty’s board decided it wasn’t a better offer than the merger and rejected it in March.

Welltower’s offer was for $31.75 a share, and it could make another offer, the WSJ reports. An acquisition would give Welltower a deeper medical office presence, an area it has already been growing in recent months.

In August, Welltower bought six medical office buildings in New York City via a joint venture with Aspect Health, paying $98M. It has also been picking up senior housing at a fast clip; last summer it spent $1.58B on a portfolio of 86 senior housing sites from Holiday Retirement. In November, it bought 14 senior housing properties managed by Watermark Retirement.

“Since pivoting to offense 13 months ago, Welltower is pleased to have executed on its value-driven investment thesis, largely through granular and off-market transactions completed at a significant discount to estimated replacement cost,” CEO Shankh Mitra said at the time, Senior Housing News reported.

Healthcare Realty’s shares jumped to $28.55 Monday, per the WSJ, an increase of 5.4%. Healthcare Trust’s fell by 1.6% to $29.96.

 

Source: Bisnow

Medical Campus In Highlands Ranch Colorado Sells For $33.5 Million

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A sought-after three-building medical office campus in the heart of Highlands Ranch sold for $33.5 million to a real estate investment trust specializing in medical office properties.

Healthcare Realty, under the name Ridgeline Medical LLC, according to public records, purchased the Ridgeline Medical Campus at 9135, 9137 and 9139 S. Ridgeline Blvd. It was sold by Bancroft Capital, which paid $21.25 million for the campus in 2016.

Comprising 136,994 square feet, Ridgeline was 93% leased to tenants, including Children’s Hospital Colorado, Centura Health and Kaiser Permanente.

The campus is located near the UCHealth Highlands Ranch Hospital, which opened in June 2019, and Children’s Hospital Colorado South Campus, Highlands Ranch, which opened in January 2014. As well, Ridgeline is located adjacent to the Highlands Ranch Town Center, which offers a variety of retail amenities.

Constructed in 2001 as a suburban office park, the buildings were converted to medical office to meet the demand for the product type in the market and is one of the few outpatient medical office campus locations near the two hospitals in Highlands Ranch.

Ridgegate Medical Campus’ on-site amenities include a fitness center, showers and lockers, outdoor seating and a conference room.

CBRE’s Chris Bodnar, Lee Asher, Ryan Lindsley, Tim Richey and Charley Will represented the seller.

“The deal received a significant amount of interest from medical office investors across the country who saw the opportunity for full medical conversion at higher rents, as well as the three anchor tenants,” said Bodnar.

The buyer was able to close within a week of signing the purchase and sale agreement, all cash.

Bancroft, a privately held real estate investment firm based in Manhattan Beach, California, also owns Highland Ranch I & II, a two-building, 152,208-sf office complex at 630 and 640 Plaza Drive, as well as Sixth Avenue West, Denver Highlands and a number of other Colorado assets.

Ridgegate represents the latest addition to Healthcare Realty’s Denver area portfolio, which at year-end totaled 651,237 sf.

 

Source: Colorado Real Estate Journal