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Harrison Street Acquires Portfolio Of Eleven Medical Office Buildings In Six States

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Ryan Cos. has completed the disposition of an 11-building medical office portfolio encompassing 500,778 square feet throughout Florida, Illinois, Minnesota, North Carolina, North Dakota and Wisconsin.

Harrison Street Real Estate Capital acquired the portfolio, while Ryan Cos.’ healthcare real estate management arm will continue to offer operations services. Newmark’s Healthcare Capital Markets Group represented the seller.

The portfolio includes the 24,000-square-foot Surgery Partners Valley Ambulatory Surgery Center in Saint Charles, Ill., along with a multi-use integrated service center, among others. Completed in 2019, the Saint Charles asset at 2475 Dean St. traded for $13.9 million, according to Kane County records.

The portfolio sale succeeded another medical office transaction between Ryan Cos. and Harrison Street. Last week, the latter acquired three medical facilities across suburban Milwaukee from Ryan Cos. for a total of $92.6 million, according to the Milwaukee Business Journal. The trio of assets is currently leased to The Froedtert & the Medical College of Wisconsin and Children’s Hospital of Wisconsin.

A Cross-Sector Developer

Over the past five years, Ryan Cos. has completed more than 3.1 million square feet of medical facilities nationwide, but the developer is also active across other sectors. Last July, the company teamed up with DWS Group to develop Confluence at Mesa Gateway, a speculative industrial project totaling more than 515,000 square feet in Mesa, Ariz. The six-building industrial park is slated for a mid-2022 completion.

Ryan Cos. is also on track to break ground on a 400,000-square-foot Class AA office tower in Plano, Texas. The 24-story building is already 50 percent preleased to Ryan LLC, a tax services, software and technology firm. The office tower is scheduled for completion in early 2024.

 

Source: Commercial Property Executive

Portfolio Of Eleven Medical Office Buildings And Inpatient Rehab Facilities Trades For $240M

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The Sanders Trust and Harrison Street have sold an 11-property portfolio composed of medical office buildings and inpatient rehabilitation facilities.

Lincoln Property Co.—through Lincoln Advisors—spent $240 million to acquire the assets on behalf of a public pension fund client.

Located across Texas, Ohio, Maryland, Georgia, Mississippi and Iowa, the collection adds up to 474,100 square feet. According to a Harrison Street release, nine of the medical office buildings and inpatient rehabilitation facilities, valued at $213 million, were fully leased at the time of sale. CBRE Vice Chairmen Chris Bodnar and Lee Asher worked on behalf of the sellers.

The portfolio includes Encompass Health Rehabilitation Hospital of Austin, situated at 330 West Ben White Blvd. The 60-bed inpatient rehabilitation hospital previously traded in 2017, public records show.

Harrison Street has been quite active recently. The company, in partnership with Meridian, spent $43 million to acquire a 110,400-square-foot office building in Irvine, Calif., at the beginning of September. The joint venture plans to transform the space into Class A medical office and rebrand the property as Pacifica Medical Plaza.

 

Source: Commercial Property Executive

Ridgeline Capital Partners Acquires 10 Medical Office Buildings In Dallas-Fort Worth Metroplex

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Dallas-based Ridgeline Capital Partners, an investment firm focused on acquiring and operating healthcare real estate, has acquired a portfolio of 10 fully leased medical office buildings with a total of 99,072 square feet.

The one and two-story properties are principally located in Tarrant County (Fort Worth) on commercial corridors with high traffic.

The $5.3 million of equity capital raised on CrowdStreet was from 79 investors on the platform. CrowdStreet operates an online commercial real estate investment marketplace that gives investors access to institutional-quality offerings.

The primary tenant is U.S. Renal Care, the third-largest dialysis center operator in the U.S. The company is the sole tenant or the primary tenant at each of the 10 buildings. The other tenant is PPG Health, a multi-specialty healthcare organization with 30 locations in Dallas-Fort Worth.

Dialysis patients require consistent treatment for their entire lives until they get a transplant, which could be up to 10 years. The U.S. 1972 Medicare ESRD program insures any American who needs dialysis, insulating the industry from economic cycles. Dialysis tenants are highly sticky with an estimated historic 99% tenant retention rate for the industry. This is due to the lengthy 18-month+ licensing process for new facilities, the significant upfront capital investment required, and the necessity for frequent visits from patients who are referred by local medical providers.

The acquired properties are NNN (triple-net-leased) with tenants responsible for all expenses including taxes, insurance and maintenance.

In Sponsor’s Own Words

Jeffrey Axleym Founder and Managing Principal, Ridgeline Capital Partners, Dallas, Texas

“This was Ridgeline’s third offering on the CrowdStreet Marketplace and, as I suspected, the deal was a good fit for CrowdStreet’s investment team and the individual investors who chose to participate. The portfolio is 100% net leased, nicely cash flowing, with tenants that provide medical services that are needed in any economic environment. Ridgeline plans to add value to the properties and, likely, sell the properties individually. It’s an understandable story to investors, who are looking for yield and stability in these tumultuous times.”

In CrowdStreet’s Own Words

Ian Formigle, Chief Investment Officer, CrowdStreet, Portland, Oregon

“Despite the current market uncertainty, there was extremely high investor demand for this offering. We are seeing that our investors continue to have an appetite for investment opportunities like this one – a recession-resistant business plan, a sponsor with a strong track record, and deep expertise with the asset class.” 

 

Source: HREI