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New Health Care Real Estate-Focused REIT Plans To Deploy $2 Billion Over Next 36-48 Months

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Since its founding in 2004 as an acquirer and developer of student housing properties, Chicago-based CA Ventures LLC has branched out into other property types, including residential, industrial and senior housing.

Over the years, the firm that was originally known as Campus Acquisition – the “CA” in CA Ventures – grew into what it calls a “global, vertically integrated real estate investment management company with more than $13 billion of assets across North America, South America and Europe.”

In early 2020, the investment firm made its move into healthcare real estate (HRE) with the launching of a medical office and life science division.

In recent months, the company announced that the healthcare division had evolved into a new entity, CA Health and Science Trust Inc. (CAHST), a private real estate investment trust (REIT) focused on acquiring and developing value-add and core-plus medical office and life science facilities across the country.

Leading the private REIT are: as president, Russell Brenner, a 24-year commercial real estate (CRE) veteran with a strong background in acquiring and developing medical office buildings (MOBs) and ambulatory surgery centers (ASCs); and, as chief investment officer, Jesse Ostrow, also a CRE veteran with a strong background in real estate private equity, investment banking and consulting.

The two executives were previously with well-known Chicago-based HRE firms, as Mr. Brenner was a partner from 2012 to 2019 with Stage Equity Partners and Mr. Ostrow was the chief investment officer with MedProperties Group, a medical real estate investment, development and operating platform. He was with the firm from 2011 to 2018.

In announcing the launching of CAHST in September, the REIT also announced an initial equity commitment of up to $245 million from three partners; New York-based Davidson Kempner Capital Management LP, New York-based Monarch Alternative Capital LP and CA Ventures.

The new REIT has certainly gotten off to a fast start.

According to Mr. Brenner: “The REIT plans additional follow-on equity raises in the coming 24 months. With leverage, we will seek to deploy roughly $2 billion over the next 36 to 48 months.”

 

Source: HREI

DigitalBridge Group Agrees To Sell Wellness Portfolio For $3.2 Billion

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DigitalBridge Group Inc., the real estate investment trust led by Chief Executive Officer Marc Ganzi, agreed to sell its so-called wellness infrastructure portfolio of more than 300 facilities in a transaction valued at $3.2 billion.

The REIT is set to obtain $316 million in proceeds from the sale of the division, which includes senior housing and skilled-nursing facilities, hospitals and medical office buildings, to Highgate Capital Investments and Aurora Health Network, according to the newly released statement. Highgate and Aurora are set to assume about $2.9 billion in associated debt. Bloomberg News first reported the agreement earlier.

“We’re incredibly bullish about our ability to get the right price for that asset and, ultimately, find the right home for it,” Ganzi said on a second-quarter earnings call last month.

The REIT is working to rotate away from real estate sectors that were favored by its founder Tom Barrack and exclusively pursue digital infrastructure assets such as data centers, fiber networks and cell towers.

“There’s a path to finish the mission between now and the end of the year to get to 100% digital,” Ganzi said at a conference last month.

Boca Raton, Florida-based DigitalBridge, formerly known as Colony Capital, in June agreed to sell assets to Fortress Investment Group LLC. In March, it announced the completion of its sale of a hotel portfolio to Highgate and an affiliate of Cerberus Capital Management LP. Those transactions followed other divestitures including the sale of a stake in real estate investment firm RXR Realty as well as its warehouse portfolio.

DigitalBridge’s shares have gained 146% in the past 12 months, outperforming the Bloomberg U.S. Real Estate Large & Mid Cap Price Return Index, which rallied around 33% over the same period.

Highgate, led by Mahmood and Mehdi Kimji, has historically focused on hotels, its website shows. Its partner on the transaction, Aurora, led by Joel Landau and Leo Friedman, has been an owner-operator of skilled nursing facilities.

 

Source: Wealth Management

Fortress Eyes Acquisition Of Colony Capital’s $3B Senior Housing, MOB Portfolio

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Fortress Investment Group is in talks with Colony Capital to acquire a portfolio of medical office buildings and senior housing properties valued at $3.3B from Colony, Bloomberg reports, citing anonymous sources familiar with the matter.

The deal would represent a move away from “noncore” assets by Colony, which is currently emphasizing its digital infrastructure holdings, including data centers, cell towers and fiber networks.

Colony inked a deal in September to sell about 200 hotels to Highgate, a hotel management specialist, which valued the indebted properties at $2.8B. In 2019, Blackstone Group bought Boca Raton, Florida-based Colony’s warehouse portfolio in a $5.9B deal.

Colony now refers to its healthcare portfolio as “wellness infrastructure,” according to a recent filing with the Securities and Exchange Commission. That includes senior housing, skilled nursing facilities, medical office buildings and hospitals.

The company earns income from some of those assets under net leases to single tenants or operators and from MOBs that are both single-tenant and multi-tenant. Some of the company’s senior housing properties are managed by operators under a REIT Investment Diversification and Empowerment Act, or RIDEA, structure, which allows tax benefits compared to receiving rent under a net lease arrangement.

For SoftBank-backed Fortress, the deal would represent a further expansion into healthcare assets. The investor previously owned a controlling stake in Brookdale Senior Living, which it took public in 2005. It sold its remaining interest in that company in 2014.

ATI Physical Therapy, a major chain of outpatient physical therapy clinics in the U.S., will go public in a deal with Fortress Value Acquisition Corp. II, a blank check company formed by Fortress.

New York-based Fortress, along with Altamont Capital Partners, recently struck a deal to buy the bankrupt Alamo Drafthouse Cinema, a chain of upmarket movie theaters that was hit hard by the coronavirus pandemic.

 

Source: Bisnow