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Remedy, Kayne Anderson Real Estate Acquire Trophy Medical Office Portfolio In Denver Area

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Joint venture partners Remedy Medical Properties and Kayne Anderson Real Estate have acquired a trophy medical office portfolio in the Denver suburb of Englewood.

The acquisition of the two-building, 68,195 square foot Dry Creek Medical Campus closed April 12.

Principals of Chicago-based Remedy and Boca Raton, Fla.-based Kayne Anderson Real Estate – which, aside from hospitals and health systems, are the nation’s largest owners of medical properties – say the acquisition has many upsides and provides their firms with a number of benefits.

“This acquisition gives us the opportunity to invest in a strong, highly coveted market with excellent demographics,” says Joe Magliochetti, Chief Investment Officer of Remedy. “The Denver area is one of America’s fastest growing regions. There are almost 234,000 residents within a five-mile radius of this property, and the population is forecasted to grow 3.4 percent between 2022 and 2027, compared to only 1.2 percent for the United States as a whole.”

The area also boasts an average household income of nearly $159,000, which is 51 percent more than the national average. As home to 10 Fortune 500 companies, the area also has a diverse, thriving economy with a steady influx of highly educated, talented workers.

“The campus location is also ideal, with easy access to local transportation,” Mr. Magliochetti adds. “It’s two blocks from Interstate Highway 25 and the Dry Creek Light Rail Station, and close to two major airports. It’s also within 10 miles of seven major hospitals, including Sky Ridge Medical Center, Littleton Adventist HospitNews Releaal and Centennial Hospital.”

The facilities, located at 135 and 145 Inverness Drive E., are 100 percent leased by six leading healthcare providers with complementary specialties. Services are centered around a full-service ambulatory surgery center (ASC) leased to Orthopedic Centers of Colorado (OCC) in partnership with SCA Health, the national leader in specialty care, which is owned by UnitedHealth Group. Dr. Metz Bariatric Surgery, which is also on the campus, recently became part of HealthOne, one of the leading health systems in Colorado. Other specialties housed in the properties include imaging, spine, orthopedics, anesthesia and dermatology.

“The properties house high-quality, well-respected medical tenants that have average remaining lease terms of almost nine years,” says Antonio Minchella, Senior Managing Director, Medical Office, Kayne Anderson Real Estate. “With average annual net operating income (NOI) growth of 3 percent, the assets will deliver a steady, predictable and growing income stream.”

Mr. Minchella adds that the two properties are relatively new, with the three-story 145 Inverness Drive building built in 2019 and the one-story 135 Inverness Drive facility built in 2000. The one-story building was completely renovated into an orthopedic surgery center in 2021 and now features seven operating rooms, three convalescent care rooms, and pre-op and post-op areas.

“The surgery center has been very successful and active, performing more than 500 surgeries a month, which is among the busiest in the Denver area,” Minchella adds.

CBRE U.S. Healthcare & Life Sciences served as the broker for the transaction.

About Remedy Medical Properties

Remedy Medical Properties is a full-service healthcare real estate company and the largest owner of healthcare properties in the country, with more than 28 million square feet and 25 offices spanning 43 states. For healthcare decision-makers who want to maximize the value of their real estate while enhancing their ability to adapt, our national presence enables us to offer the right solutions in the right locations for your organization. Remedy offers unmatched flexibility in every client engagement, and our adaptability enables us to provide more options in ownership, development, leasing, management, and strategy. Our willingness to commit capital, share more risk, and offer greater foresight results in greater resilience, profitability, and peace of mind for our clients. For more information visit www.RemedyMed.com.

About Kayne Anderson Real Estate

Kayne Anderson Real Estate (“KA Real Estate”) is a leading real estate private equity investor in medical office, senior housing, off-campus student housing, multifamily housing and self-storage. KA Real Estate manages $14.5 billion of real estate AUM across opportunistic equity and real estate debt. KA Real Estate is part of Kayne Anderson Capital Advisors, L.P., a $34 billion alternative investment management firm with more than 38 years of successful experience in the real estate, infrastructure, credit, and growth capital sectors (as of 9/30/2022).

 

Source: HREI

Remedy And Kayne Anderson In Joint Venture Buy 13-Property MOB Portfolio In 8 States For $131M

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Remedy Medical Properties, in a joint venture with Kayne Anderson Real Estate, has acquired the Project Prism medical office portfolio, a collection of 13 properties in eight states totaling 300,328 square feet.

The fully leased assets traded for $131 million, with the participation of JLL. The previous owner was Montecito Medical Real Estate, CommercialEdge data shows.

The medical office buildings are leased on a long-term basis with a weighted average lease term of 10.4 years.

 “The properties’ tenants have strong patient bases and track records, some of them being nationally renowned companies,” Remedy CIO Joe Magliochetti stated in prepared remarks.

Optum-Marsh, Halo Breast Center, Jordan Young Institute and Precision Spine Care are some of the health-care providers that occupy the facilities. On-site medical services include orthopedics, neurology, gastroenterology, radiology, imaging and surgery, as well as general spine and pain management, family medicine and other services.

Previous Joint Venture Acquisitions

The Project Prism portfolio is not the first acquisition for the Remedy-Kayne Anderson duo, as the joint venture’s purchasing history dates back to early 2022. In February, the partnership, alongside MedProperties Realty Advisors, formed a $350 million-plus joint venture to recapitalize a 23-asset health-care real estate portfolio totaling more than 1 million square feet.

Later that year, the companies added eight medical office buildings to their joint investments. The properties, located in Florida, Texas, North Carolina and Tennessee, changed hands for $91 million.

 

Source: Commercial Property Executive

Remedy And MedProperties Form $350 Million Medical Office Building Joint Venture

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Remedy Medical Properties and MedProperties Realty Advisors LLC formed a $350 million-plus joint venture to recapitalize an 11-state, 23-asset healthcare real estate portfolio totaling more than 1 million square feet owned by MedProperties.

Capital One provided senior debt for the transaction. Terms were not disclosed. The CBRE Healthcare & Life Sciences Capital Markets team marketed the portfolio.

The portfolio contains primarily medical office buildings as well as some post-acute facilities, including a rehabilitation hospital and ambulatory surgery center in Texas and rehabilitation hospital in Ohio. The properties are located in Texas (eight facilities), Florida (two), Pennsylvania (two),  Ohio (two), Kentucky (two) and one each in Tennessee, New York, North Carolina and Missouri.

The properties are located in some of the country’s top metropolitan areas and strategic, secondary markets. The assets are 94 percent occupied and 71 percent leased by high-caliber investment-grade tenants, including leading hospitals and health systems. One of the properties in the portfolio is Founders Square, a 35,000-square-foot medical office building in Naples, Fla., developed in 2020 by MedProperties and Catalyst Healthcare Real Estate.

Investment-grade healthcare tenants include: Baylor Scott & White, Children’s Hospital of Los Angeles, CommonSpirit, Rady Children’s Hospital, U.S. Department of Veterans Affairs, University of Southern California, UF (University of Florida) Health and WVU (West Virginia University) Medicine.

Deal Details

Darryl Freling, managing principal of Dallas-based MedProperties, said in a prepared statement his company aggregated a large number of assets through the years through its various funds and investment partnerships. In fall 2020, the firm’s leadership decided to offer a portfolio of about a two dozen of those properties as a recapitalization investment opportunity rather than an outright sale. He said the offering was taken to market in early 2021 and Remedy emerged as the joint venture partner in summer 2021.

The joint venture enabled Chicago-based Remedy, the nation’s largest owner of medical properties, to acquire a majority interest in another high-quality portfolio that complements its own holdings. Remedy’s properties total more than 26 million square feet across 42 states.

Joe Magliochetti, chief investment officer for Remedy, said in prepared remarks the portfolio is a logical addition to Remedy’s holdings and complements his company’s existing assets in terms of geography and tenancy.

The two companies have transacted smaller deals in the past and Remedy has made previous recapitalization deals with other private equity HRE investors. But this was the first time Remedy had done a transaction of this size with a private equity firm that was also another operator and competitor.

Earlier MOB Deals

In May, Remedy paid $55.2 million for Andover Medical Center, a 69,992-square-foot medical office property in the Boston suburb of Andover, Mass., owned by EverWest Real Estate Investors. The deal nearly doubled Remedy’s metro Boston footprint.

A month earlier, Remedy teamed with Kayne Real Estate Advisors in a joint venture to acquire Gresham Station Medical Plaza, a four-building, 100,419-square-foot medical office campus in Gresham, Ore. The joint venture paid $30.9 million for the Class B asset, according to public records. CommercialEdge data stated the previous owner was Stockdale Capital Partners, which had owned the property since 2017.

In one of its recent deals, MedProperties Fund III acquired a 67,060-square-foot multi-tenant medical office building in Glendale, Calif. The six-story facility is located on the campus of CommonSpirit-affiliated Glendale Memorial Hospital.

 

Source: Commercial Property Executive