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Artemis Recapitalizes Six Properties With Rendina To Seed New Joint Venture For Development And Acquisition Of MOBs Nationwide

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Newmark announced that it has arranged a strategic joint venture seeded by a national MOB portfolio recapitalization.

Rendina Healthcare Real Estate  is a leading, national medical office development and acquisition platform, fully integrated with development, ownership, management and leasing capabilities. A pioneer in the healthcare real estate development sector, Rendina has developed more than 8.5 million square feet during its 35-year history.

This transaction marks an inflection point in the growth of the company as the firm partners with Artemis Real Estate Partners, an institutional investment manager that focuses on equity and debt investments in healthcare real estate across the United States.

Rendina and Artemis have entered into a joint venture to develop and acquire a national portfolio of healthcare properties. The venture was seeded with the recapitalization of six properties developed by Rendina. The nearly 230,000 square foot portfolio spans four states, with concentration in the Northeast, and is leased to some of the leading healthcare systems and physician group practices in the country. The joint venture will immediately invest in an additional 140,000 square foot medical office development, followed by a near-term development and acquisition pipeline.

Newmark’s Healthcare Capital Markets Group represented Rendina on the portfolio recapitalization, advised Rendina and Artemis on establishing the joint venture, and secured the acquisition and development financing. The transaction was led by Newmark Executive Managing Director Ben Appel, Senior Managing Directors Jay Miele and Michael Greeley, Managing Director John Nero, and associates Ron Ott and Adam Goss of the firm’s National Healthcare Capital Markets Group.

“Like-minded investment philosophy, culture-fit, sophisticated understanding of the healthcare real estate market and appetite for portfolio growth were key criteria in our selection process. Artemis checked all the boxes we were looking for in a programmatic equity partner, said Richard Rendina, Chairman & CEO of Rendina.

“Artemis is excited to partner with a best-in-class sponsor like Rendina to grow a high quality portfolio of healthcare real estate assets. Rendina has the relationships and proven track record that we were looking for in a partner” stated Kevin Nishimura, Principal of Artemis Real Estate Partners.

“Rendina has seen tremendous success having developed for many of the Nation’s largest and most highly-regarded health systems, and dominant physician networks,” said Appel.

“This programmatic venture further supports Rendina’s growth, providing the firm additional resources to meet the evolving needs of healthcare providers across country,” added Miele.

“This joint venture will make Rendina even more competitive on development opportunities and will also provide us the acquisition platform and portfolio growth we have long-desired”, said Richard Rendina. “We believe the combination of Rendina’s expertise with Artemis’ capital will be a winning recipe not just for us, but for our healthcare provider clients as well. Rendina believes our health system relationships are our most valuable assets. Artemis understands this nuance to our business, and has shown us that they value relationship-based business and decision-making the same way Rendina does.”

 

Source: HREI

Healthcare Is Entering A New Era Of Medical Office Development

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Meridian CEO John Pollock uses three words to describe the biggest trend in healthcare real estate at the moment: outpatient, outpatient, outpatient.

“As healthcare enters a new era, companies providing more outpatient services are on an upswing,” Pollock said. “We are in an era of tremendous growth in outpatient services,” Pollock wrote in an email to Bisnow. “In fact, we are so sure that outpatient services is where the industry is headed that this sector is nearly our singular focus at Meridian. I believe that as healthcare systems provide more care in a lower acuity setting, they will be able to provide a better experience for patients and at a lower price.”

Healthcare is undergoing a tremendous transformation. Healthcare is adjusting, evolving and growing rapidly as baby boomers continue to retire, millennials and Generation Z mature, and technology continues to shape the healthcare space.

“Now more than ever, bigger players and more money — especially from institutional investors — are entering the industry, CBRE First Vice President Angie Weber said. “These large providers have really taken over and the independent physician has become a thing of the past,”

Weber and Pollock are speaking at Bisnow’s National Healthcare West event June 20. Because of the growing population and the fact that most everyone at one time or another gets sick, healthcare is seen as a safe and resilient investment.

“It’s very safe and strong,” Weber said. “But it’s very expensive. The cost of managing staff and patients, tenant improvements and construction are very high.”

Outpatient demand is driving the development of medical office buildings greater than 150K SF, according to a JLL report released in May.

“No area of growth in healthcare is higher than outpatient services,” Pollock said.

There are currently 44 medical office developments larger than 150K SF under construction in the U.S., according to the report. The projects, estimated at $5.3B worth of investment, total nearly 11M SF and represent 22% of all medical office projects underway, the report states. Of the 44 projects, five are 450K SF or more, one is in the 350K SF to 449K SF range, eight are 250K SF to 349K SF, nine are 200K SF to 349K SF and 21 developments are 150K SF to 199K SF.

“This new trend is a function of the well-recognized growth in outpatient care with its focus on the patient experience and physician convenience with critical services and specialties housed under one roof, with the added goal of accountable care in a lower cost setting,” the report states. “The timing couldn’t be better given the surge in capital seeking investment opportunities in healthcare given the quality of tenancy and durability of medical office properties.”

Weber said the outpatient trend is being driven by a combination of demands from patients and medical providers. Many people, especially millennials, don’t like visiting a hospital for treatment.   Medical providers also find that it costs more to do certain medical procedures in a hospital than an outpatient setting.

“Along with preventive care options, medical providers are opening more specialized healthcare facilities, such as those that offer treatment for depression or post traumatic stress disorder and behavioral and mental health facilities,” Weber said.  “We’re going to see more of that,” she said. “I think you’re going to see these outpatient clinics in all shapes and sizes.”

 

Source: Bisnow