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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

CIT Serves As Sole Lead Arranger On $48 Million Portfolio Financing Of Medical Office Buildings

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CIT Group Inc. announced that its Healthcare Finance business served as sole lead arranger of senior debt financing aggregating $48 million for the acquisition of a portfolio of medical office buildings.

The borrower is a joint venture between Kayne Anderson Real Estate and Remedy Medical Properties. The portfolio properties are located in four states and collectively total more than 189,000 square feet. They include:

• The Bon Secours Medical Office Building  in Chesapeake, Virginia

• The Locust Grove Medical Center in Locust Grove, Georgia

• The Spectrum Medical Office Building in Gilbert, Arizona

• The Arizona Spine and Joint Medical Office Building in Mesa, Arizona

• The Plano Medical Office Building in Plano, Texas

“These medical office buildings are modern facilities in attractive locations, easily accessed by healthcare patients and providers,” said Peter Westmeyer, CEO, Remedy Medical Properties. “We are pleased to add these properties to our portfolio and appreciate CIT’s agility and expertise in arranging financing.”

“Kayne Anderson Real Estate and Remedy Medical Properties are well-known as leading investors in medical office buildings and other real estate,” said William Douglass, managing director and group head for CIT’s Healthcare Finance business. “We are excited to have expanded our relationship with the Kayne Anderson/Remedy joint venture through providing this very important acquisition debt financing.”

CIT’s Healthcare Finance unit, part of the Commercial Finance division, provides comprehensive financing and banking solutions to middle market healthcare companies across the U.S. By using a client-focused and industry-centric model, the Healthcare Finance team can tailor its products and services to help clients meet their needs for growth capital.

 

Source: PRNewswire