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Physicians Realty Trust Announces Agreement To Purchase Medical Office Portfolio For $764 Million

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Physicians Realty Trust, a self-managed healthcare real estate company, announced today that the Company, through its operating partnership, Physicians Realty L.P., a Delaware limited partnership, has executed a Master Transaction Agreement for the acquisition of 15 Class-A medical office buildings located in eight states, comprising approximately 1,460,000 square feet, for an aggregate purchase price of approximately $764.3 million, subject to closing prorations and other adjustments.

The Pending Acquisitions

The portfolio is approximately 95% leased with a weighted average remaining lease term of approximately 7.4 years. Each of the 15 buildings are either located on a health system campus or are affiliated with a health system, and approximately 74% of aggregate leased space is attributable to investment grade health systems or their subsidiaries. Upon closing, the first year unlevered cash yield of the portfolio is expected to be 4.9%. The Company expects that the transaction will be completed in the fourth quarter of 2021.

At closing, the Company anticipates funding the purchase of the Pending Acquisitions through the issuance of units of the Operating Partnership, the assumption of indebtedness on certain properties, the satisfaction of existing mezzanine loans outstanding, and proceeds from its unsecured line of credit.

The Master Transaction Agreement contains customary representations, warranties and covenants of the parties. The Pending Acquisitions are also subject to the satisfaction of certain conditions to closing, including the waiver of health system purchase rights with respect to certain properties. There can be no assurance that any or all of the conditions to closing will be satisfied or, if satisfied, that the Operating Partnership will complete the Pending Acquisitions, or effectuate the closing in a timely manner or at all.

About Physicians Realty Trust

Physicians Realty Trust is a self-managed healthcare real estate company organized to acquire, selectively develop, own and manage healthcare properties that are leased to physicians, hospitals and healthcare delivery systems. The Company invests in real estate that is integral to providing high quality healthcare. The Company conducts its business through an UPREIT structure in which its properties are owned by Physicians Realty L.P., a Delaware limited partnership (the “Operating Partnership”), directly or through limited partnerships, limited liability companies or other subsidiaries. The Company is the sole general partner of the Operating Partnership and, as of June 30, 2021, owned approximately 97.6% of the partnership interests in the Operating Partnership (“OP Units”).

Investors are encouraged to visit the Investor Relations portion of the Company’s website (www.docreit.com) for additional information, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, press releases, supplemental information packages and investor presentations.

 

Source: HREI

Harrison Street Buying Senior Housing Portfolio For $1.2B, Selling MOBs For $371M

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Harrison Street Real Estate Capital is set to acquire a portfolio of 24 senior housing communities for about $1.2B as it sells a medical office building portfolio of about half that size.

The senior living properties, which are mostly in California but also Nevada, are operated by Oakmont Senior Living. The portfolio totals 2,195 units that are mainly assisted living and memory care. The sellers are the Gallaher Cos. and Healthpeak Properties, which each own 12 properties in the portfolio.

The Healthpeak communities are on average 4 years old, with occupancies stabilized at 96% from 2016 to 2019, according to Harrison Street, adding that the Gallaher assets are recently built as well.

“The senior housing sector remained resilient throughout the pandemic and is poised for growth,” Harrison Street Global Chief Investment Officer Michael Gordon said in a statement. “Specifically, the assets we are acquiring are managed by a leading operator in Oakmont and located in attractive markets backed by solid demographics.”

Chicago-based Harrison Street in December raised $720M for a new fund that will focus at least partly on senior housing, Senior Housing News reports. The fund could raise as much as $2B. In February, Harrison Street bought 12 senior housing communities from Healthpeak for $312M.

Harrison Street also said it is selling a 14-property medical office portfolio totaling 833K SF for $371M. The properties, which are in Virginia, Illinois, Minnesota, New Jersey, Oregon, Texas and California, are held by Harrison Street’s core fund and U.S. opportunity funds.

 

Source: Bisnow

Sila Zeros In On Healthcare With $1.3B Data Center Portfolio Sale

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With the sale of a 29-property data center portfolio, Sila Realty Trust is exiting the data center space to focus on healthcare.

Sila sold 29 data center properties to Mapletree Industrial Trust, a REIT listed on the Singapore Exchange, for $1.3 billion. The transaction will be completed in one or more closings during Q3 2021.

“This action marks another key step in Sila Realty Trust’s evolution to provide a clear path for the company to pursue a strategy as a pure-play healthcare REIT,” said Michael A. Seton, Sila CEO and president in a prepared statement.

Sila Realty Trust, previously known as Carter Validus Mission Critical REIT II, owned both data centers and healthcare assets before the sale.

As one example of the type of assets it seeks, last September Sila purchased Tampa Healthcare Facility, a 33,822 rentable square foot medical office building constructed in 2015. The building is located on 2.87 acres in Tampa, the second-fastest growing market in Florida and the twelfth-fastest growing market in the US. The facility, which was 100% net-leased to six tenants at the time of the sale, serves as a strategic location for both primary and urgent care, pediatric spinal care, clinical laboratory services and various types of outpatient surgery.

In the release announcing the sale, Seton said the company was focused on acquiring high-quality, well-located assets with a strong and diverse tenant roster.

“All of these attributes are indicative of our existing portfolio combination and we expect this property will serve as a strong complement to our growing asset base,” Seton said at the time.

It shouldn’t be a surprise that Sila is focusing on the medical sector. It has held up exceptionally well through the pandemic. While medical office buildings sales volume declined in 2020, it was much less of a drop than the other commercial real estate sectors, according to a report from Colliers.

MOB investment decreased 12.2% year-over-year in 2020 to hit $11.1 billion, according to Colliers, while cap rates fell 20 basis points to 6.5%. By comparison, commercial real estate posted a 32% decline in sales volume overall.

 

Source: GlobeSt.