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AEW JV Acquires Eight Medical Buildings In Seven States Across The Southern And Midwestern U.S.

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A joint venture between AEW Capital Management and Flagship Healthcare Trust have completed the acquisition of eight medical buildings totaling 145,561 square feet in seven states across the Southern and Midwestern U.S. in a series of compounding transactions.

The purchase was financed through a loan by Fifth Third Bank, who had secured a senior credit facility for the buyers. Following the acquisition, Flagship will provide property and asset management services for the portfolio.

The facilities, which consist entirely of ambulatory surgery centers, are located in Texas, Arizona, Michigan, Illinois, Missouri, Tennessee and Florida. Nearly all of the tenants leasing space within the portfolio specialize in health care, with three quarters of them in top five national surgery centers and health systems.

Two of the properties in the portfolio include the Kleimen Evangelista Eye Center, located at 350 E Interstate 20 in Arlington, Texas, and the Joliet Surgery Center, located at 998 129th Infantry Dr. in Joliet, Ill.

The Kleiman Evangelista Eye Center was built in 2015, and was previously owned by the Inland Real Estate Group, who had purchased it in 2017, according to CommercialEdge information. The property totals 27,500 square feet and is fully occupied by a leading Texas ophthalmology provider. Situated the Interstate 20 highway, the facility can be quickly accesses by patients throughout the suburbs of Arlington, as well as the larger Dallas-Fort Worth area.

Fifth Third Bank Executive Managing Director Michael Perillo oversaw the financing of the transaction.

The Medical Office Mires

Health-care and life science facilities remain a resilient commercial real estate investment, with investors eager to get their hands on these properties. The sector recorded more than $2.9 billion in transactions in the second quarter of 2022, according to data from a report from the Brown Gibbons Lang & Co. While that marks a slight decrease from the $3.3 billion in the same period of 2021, it significantly outranks activity in other office markets.

Market Street Health Properties and Sixth Street recently created a platform to invest $300 million in medical office buildings around the nation.

 

Source: Commercial Property Executive

New Platform To Invest Up To $300M In U.S. Medical Facilities

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Health-care developer and investor Market Street Health Properties and Sixth Street, a global investment firm, have formed an institutional scale platform to invest up to $300 million initially in medical office buildings and facilities across the U.S.

Sixth Street’s investment is expected to support more than $1 billion of health-care properties and may be supplemented with additional equity commitments over time. The platform will exclusively pursue health-care real estate opportunities, including acquiring existing assets and building ground-up developments. It will also support the real estate initiatives of medical providers, with a focus on tenant-driven structures, including sale-leasebacks and build-to-suits.

The partners did not disclose markets they are targeting, but MSHP, a Newport Beach, Calif.,-based firm, primarily invests in the Northwest, Southwest and Southeast. The firm currently has multiple portfolio investments in California, Washington, Nevada, Florida, Michigan, Oklahoma and Missouri. Formed in 2010, MSHP has completed more than 80 ground-up developments and multiple core and value-add acquisitions involving a broad range of institutional and large-scale national organizations and publicly traded health-care service providers.

Neil Davis Wachsberger, a partner at MSHP, said in a prepared statement “The platform with Sixth Street is designed to accommodate unique deal structures with a focus on being nimble and highly creative. The firm has longstanding tenant relationships and the ability to deliver customized solutions for health-care properties across the nation.”

In addition to Wachsberger, MSHP is led by two other industry veterans, Charles Smyth and Sheldon Anderson. The three executives have more than 85 years of real estate and health-care development, construction and investment experience with significant expertise in the medical office sector.

Wachsberger said they are excited to partner with Sixth Street, a leading global investment firm with more than $80 billion in assets under management. Sixth Street Real Estate invests in properties and provides financing solutions across the full range of real estate asset classes, including niche assets. The firm’s real estate business invests up and down the capital structure including equity, preferred equity and debt. Founded in 2009, Sixth Street is headquartered in San Francisco, with offices in Boston, New York, Dallas, Houston, London and Luxembourg.

 

Source: Commercial Property Executive