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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

Survey: Patients Strongly Prefer Off-Campus Healthcare Experiences

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In an effort to uncover critical insights into patient behavior and serve as thought leaders within the healthcare real estate industry, Physicians Realty Trust (the “Company”) commissioned an independent survey in five of the Company’s largest markets to better understand consumer perceptions of healthcare facility safety within the context of the COVID-19 pandemic.

CVR and Carmichael & Company, healthcare consultants based in Indianapolis, conducted the panel-based survey for the Company, surveying the Atlanta, Dallas, Louisville, Minneapolis, and Phoenix markets. A total of 2,018 respondents were surveyed, resulting in an average margin of error of 2.19% across the five markets.

Strong Consumer Preference for Off-Campus Medical Facilities

The research revealed that when seeking medical treatment, the overwhelming majority of respondents prefer to receive care in an off-campus medical facility located a mile or more from a hospital campus. Based on survey results, this trend is likely to continue for the foreseeable future due to COVID-19, especially given concerns regarding a possible resurgence of the virus later this year.

“The findings affirm our long-term observations in consumer attitudes and validate the Company’s continued investment strategy targeting off-campus medical office buildings,” said John T. Thomas, President and CEO of Physicians Realty Trust. “As thought leaders in the healthcare industry, we commissioned this research to advance our understanding of COVID-19’s impact on our business, as well as provide insight and guidance to our healthcare partners.”

In the report, respondents also provided insights on enhanced safety and hygiene protocols, spokesperson preferences for COVID-19 communication, and other shifting perceptions of healthcare highlighted by the pandemic.

“For many years, consumers and physicians have been seeking services at locations convenient to them and their homes, often away from hospital campuses,” Thomas added. “This study verifies that especially in light of COVID-19 safety and cleanliness concerns, consumers strongly prefer medical office facilities located away from the hospital campus.”

The Company is sharing these findings with its healthcare partners and stakeholders to increase awareness and better understand healthcare consumers’ decisions.

To access the report, go to www.docreit.com/research.

 

Source: PRNewswire