HRT will contribute the assets to a new joint venture in two phases. The first phase, which should be completed in August, will see the contribution of eight current HRT properties valued at $193 million.
As part of its pending-yet-imminent merger with Healthcare Trust of America Inc., Healthcare Realty Trust Inc. is currently under contract with five counterparties to sell or joint venture 27 properties totaling $807 million.
For a subset of these properties valued at a total of $673 million, the counterparties have secured their investment committees’ approval or due diligence periods have expired. These transactions are expected to close within 10 days of the completion of the merger, which is expected on or around July 20. The rest of the properties under contract are scheduled to close by the middle of August.
As had been announced previously, the merger consideration includes a stock exchange ratio of 1:1 and a special cash dividend of $4.82 per share to HTA shareholders, totaling $1.1 billion.
HRT expects to fund the $1.1 billion dividend through the above-mentioned $807 million in asset sales and joint venture transactions, as well as 10 properties under letter-of-intent with three counterparties for $295 million, all at a blended cap rate of 4.8 percent.
HRT further announced that it “is also in active discussions with multiple counterparties regarding the sale of additional properties valued at more than $600 million at similar cap rates.”
The asset sales, HRT reported, “refine its portfolio by increasing the percentage of on-campus properties and improving the percentage of properties in top 100 MSAs….”
In a prepared statement, HRT President & CEO Todd Meredith said that with these transactions, the company has secured funding for the special cash dividend at an attractive cost of capital and that it expects to continue to positively shape the combined company’s portfolio and source accretive capital through more asset sales and joint venture investment.
An HRT spokesperson confirmed to Commercial Property Executive that the combined company will keep the Healthcare Realty name and continue to trade under its NYSE symbol (HR).
Finally, HRT stated that it expects to form a new joint venture with CBRE Investment Management. Initially, HRT plans to contribute four former HTA properties, while retaining a 20 percent interest in the joint venture and managing and leasing the properties.
In late 2020, HRT entered into a 50-50 joint venture agreement with TIAA to invest in medical office properties at the pace of about $200 million a year.
And in April of last year, HRT purchased a 57,600-square-foot medical office building in Laguna Hills, Calif., from Meridian for $31.3 million.
Source: Commercial Property Executive
Healthcare Realty Trust Incorporated (NYSE:HR) announced that it has entered into a joint venture agreement with Teachers Insurance and Annuity Association (“TIAA”) to invest in a broad range of medical office buildings.
The joint venture strengthens the Company’s efforts to sustain higher investment volume and earnings growth regardless of market volatility by further diversifying its funding sources. The Company is the managing member of the partnership and manages day-to-day operations and leasing of the properties in the joint venture.
Healthcare Realty owns a 50% interest in the joint venture and will fund its pro-rata share of future investments. The joint venture expects to purchase approximately $200 million of properties annually and does not contemplate using property level debt in most instances.
On November 12th, the joint venture purchased its first property for $16.6 million at a 5.1% cap rate. The 92,139 square foot building is located on Allina Healthcare’s Mercy campus in Minneapolis. The joint venture will seek to realize additional value through the lease up of the 80% occupied building. Property level debt was not associated with this initial acquisition. The Company intends to provide additional disclosure in its future quarterly supplemental materials regarding properties owned by the joint venture. BlackBirch Capital served as advisor to Healthcare Realty on this transaction.
Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of September 30, 2020, the Company owned 211 real estate properties in 24 states totaling 15.5 million square feet and was valued at approximately $5.5 billion. The Company provided leasing and property management services to 11.9 million square feet nationwide.
In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2019 under the heading “Risk Factors,” and in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020 and other risks described from time to time thereafter in the Company’s SEC filings. Forward-looking statements represent the Company’s judgment as of the date of this release. The Company disclaims any obligation to update forward-looking statements.
Source: GlobeNewswire
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