Posts

Ardent Health Portfolio Of 16 Fully Occupied MOB Properties For Sale In Texas

/0 Comments/in /by

Jones Lang LaSalle Americas, Inc. is offerring for sale The Ardent Health Medical Office Portfolio, a unique opportunity to invest in over 762,000 square feet of medical office buildings leased by partnerships between Ardent Health Services, a leading national private for-profit integrated healthcare provider based in Nashville, Tennessee, and two market-leading academic health systems, The University of Texas Health Science Center at Tyler and The University of Kansas Health System.

The institutionally-managed Portfolio consists of 16 fully occupied properties in Texas and two in Kansas. Upon sale, the Portfolio will be 100 percent leased under new absolute net master leases with substantial 12 years of term and contractual annual rental escalations of two percent, offering durable in-place cash flows and growth in income.

The Portfolio features 13 buildings on hospital campuses representing 91 percent of the rentable area of the Portfolio. The underlying occupancy is nearly 100 percent and the health systems directly occupy 80 percent of the Portfolio net rentable area.

Each of the properties represents strategic on and off-campus locations featuring mission critical infrastructure and a variety of critical medical uses. The Portfolio offers desirable scale to investors in concentrated geographic patient service areas.

The properties are a combination of leasehold interests in campus locations with long-term ground leases and fee simple interests in community locations. The Portfolio will be delivered free and clear of mortgage encumbrances to the purchaser.

Investment Highlights

INSTITUTIONAL-QUALITY MEDICAL OFFICE PORTFOLIO
• 100% leased featuring 80% direct health system tenancy – fully occupied buildings
• 91% of rentable square feet concentrated on campus
• Portfolio comprised of nine single-tenant and nine multi-tenant buildings
• Institutionally managed by a highly regarded and experienced health system owner-operator, Ardent Health Services

SCALE IN MEDICAL OFFICE
• Exceptionally rare opportunity to acquire a large scale, institutional medical office portfolio with a single healthcare system comprised of 762,780 rentable square feet across 18 properties
• Geographic concentrations in Texas and Kansas
• Average building size over 40,000 square feet

ALIGNMENT WITH LEADING HEALTH SYSTEMS
• 100% master leased by affiliates of UT Health East Texas and KU Health-St. Francis
• UT Health Tyler and KU Health – St. Francis enjoy 39% and 26% inpatient market shares, respectively
• 80% direct health system occupancy across the Portfolio
• Strategic outpatient strategies for each health system or third-party provider groups
• Opportunity to partner and strengthen relationships with Ardent Health Services and its premier academic health system partners, The University of Texas Health Science Center at Tyler and KU Health

HIGHLY STABLE INCOME STREAM
• Absolute net lease structures and contractual rent escalations provide predictable and growing income stream with no capital requirements
• High probability of renewal in-place with strategic locations and critical infrastructure
• No tenant termination rights
• Modest in-place rents allow for consistent NOI growth across the Portfolio and a favorable basis for investors

 

Source: HREI

Healthcare Real Estate Execs Foresee A Big Year For Medical Office Buildings

/0 Comments/in , /by

For the past several years, professionals involved in the medical office building (MOB) sector have been saying that, aside from an economic downturn or total transformation of the healthcare system, there is just one thing that could slow the growth and success of the product type: a black swan event.

Well, from a business and economic perspective, the COVID-19 pandemic is the very definition of a black swan: an extremely rare, unanticipated event that caused widespread and catastrophic economic damage.

However, not only has the MOB product type survived seemingly unscathed, but it has thrived and even become a more desirable investment property type among an ever-growing pool of capital sources.

“As we’ve now seen going through a … few black swan events, I mean, these are resilient asset classes,” said Christopher Merrill, chairman and CEO of Chicago-based Harrison Street, a real estate investment firm he co-founded in 2005 and which has more than $32 billion of assets under management, with a strong focus on healthcare.

 

Source: HREI

Wall Street Analysts Laud Medical Office Building Sector During BOMA MOB Conference

/0 Comments/in , /by

With medical office buildings (MOBs) continuing to show their resiliency amid the COVID-19 pandemic, it would only make sense that the product type continues trading at strong pricing and attracting an even wider range of investor types.

MOB sales volume in the first half of 2020, was $5.5 billion, “which was 10 percent higher than in the same period in 2019,” according to Mindy Berman of JLL. “This is really a ratification of medical office, and our sentiment at this point is (the volume) we will equal or exceed the 2019 level.” (PHOTO CREDIT: HREI)

Perhaps left out of the MOB buyer’s market of late have been the country’s healthcare-focused, real estate investment trusts (REITs). While their stock prices have rebounded in recent months from large drops at the outset of the pandemic, the REITs haven’t been as big of a buyer group as they normally are.

“But you know that puts the REITs undervalued right now, in our in our opinion, relative to their net asset value,” said Todd Stender, a senior equity analyst with Wells Fargo Securities. “That also is going to contribute to them maybe not growing externally as fast, if they don’t have access to the equity market. HTA (Healthcare Trust of America, NYSE: HTA), for example, does have some forward equity that they can tap, and they prudently tapped that market recently and I believe they have until June of next year to tap that equity.”

 

Source: HREI