BATTLE CREEK, MICH. — Griffin-American Healthcare REIT IV Inc. has acquired Battle Creek Medical Office Building in Battle Creek, about 25 miles east of Kalamazoo. The 46,000-square-foot property is situated on 7.3 acres in a medical office park. The building is currently 97 percent leased and anchored by Brookside Surgery Center. American Healthcare Investors and Griffin Capital Co. LLC are the co-sponsors of the REIT.
WEST PALM BEACH, FLA. — Berkadia has arranged a $22.5 million bridge loan for the repositioning of the former Bank of America office building located at 625 N. Flagler Drive in West Palm Beach. The borrowers, led by FRI Investors, purchased the 110,000-square-foot, 10-story asset last year in an all-cash transaction with the intent to convert the property into a medical office building. Bank of America vacated its 40,000-square-foot lease at the property late last year. The building is currently 50 percent leased to tenants including Mount Sinai Hospital and Jupiter Medical Center. Charles Foschini and Christopher Apone of Berkadia’s South Florida office arranged the three-year loan with an adjustable interest rate through PCCP LLP.
NASHVILLE, TENN. — Ardent Health Services has acquired LHP Hospital Group Inc., creating the second largest private, for-profit hospital operator in the United States, with 19 hospitals in six states and $3 billion in revenues, according to Ardent. Although the purchase price was not disclosed, Ventas Inc., a massive healthcare REIT, provided $700 million in financing to Ardent for the acquisition. The five-year, LIBOR-based acquisition loan bears an initial cash interest rate of approximately 8 percent. As part of the transaction, Ardent received a significant equity contribution from its majority owner, an affiliate of Equity Group Investments. Ventas also made an equity contribution to maintain its 9.9 percent equity stake in Ardent. LHP’s portfolio of hospitals were all operated in joint ventures. LHP’s portfolio includes Bay Medical Center in Panama City, Fla.; HUMC Mountainside in Montclair, N.J.; HUMC at Pascack Valley in Westwood, N.J.; Portneuf Medical Center in Pocatello, Idaho; and Seton Medical Center in Harker Heights, Texas. Under the terms of the agreement, Ardent will assume LHP’s management and operational responsibilities within each joint venture partnership. The transaction is not expected to impact the day-to-day operations of the affiliated hospitals. The Ardent management team will also continue to lead the …
TOWN OF HUNTINGTON, N.Y. — Simone Development Co. has received approval from the Town of Huntington to redevelop two buildings located at 5 Cuba Hill Road for medical use. Defense contractor BAE Systems sold 18 acres of its property, located in the Greenlawn area of Huntington (on Long Island), to the Bronx-based developer late last year. At the time, Simone Development leased the four-building complex totaling 200,000 square feet back to BAE. A nine-acre portion with two existing buildings totaling 95,000 square feet will be redeveloped for medical use. Mount Sinai Doctors Long Island, which is part of the Mount Sinai Health System, will become the tenant. Mount Sinai will combine three of its current locations in Huntington into a practice at the new Greenlawn location. The new site will offer imaging services, primary care, pediatric and concierge medicine along with specialty services. In November 2015, KeyBank provided financing to Simone Development for the acquisition and redevelopment of the 5 Cuba Hill property.
BUFFALO, N.Y. — Seavest Healthcare Properties and Ciminelli Real Estate Corp. have secured permanent financing for the seven-story, 350,000-square-foot Conventus medical office building on the Buffalo Niagara Medical Campus (BNMC) in downtown Buffalo. The $75 million, five-year takeout loan replaces the building’s initial construction loan. Both loans were provided by M&T Bank and KeyBank. Located at 1001 Main St., Conventus is connected on two full floors to a children’s hospital and will also be connected to a new medical school by a skybridge. Serving as the northern gateway to the BNMC, the $110 million Conventus building is certified LEED Platinum.
OMAHA, NEB. — Darland Construction Co. has partnered with BCDM Architects and Omaha Public Schools to build a school for students with special needs. J.P. Lord School will be relocated from its current location at the University of Nebraska Medical Center’s main campus to a new location near 45th and Marinda streets. The 45,000-square-foot school will feature handicap accessible hallways and classrooms, multi-sensory elements, a therapy pool and mobility devices throughout. The school serves students ages five to 21, and the new location is slated to open in the fall of 2018.
DERBY, KAN. — MedCraft Healthcare Real Estate LLC is developing a $5 million build-to-suit medical facility for Via Christi Clinic in Derby, a suburb of Wichita. The 15,000-square-foot clinic will be located on the northwest corner of Tall Tree Road and Newberry Street. Completion is slated for this fall. The new building will allow Via Christi to expand from four family medicine and pediatric providers to eight, as well as integrate primary care and physical therapy. The clinic’s current location opened 19 years ago at 1720 Osage Road. Eby Construction is the contractor for the project, and Howard + Helmer Architecture is the project architect.
As the 65-and-older age segment increases by 20 million individuals over the next 10 years, demand for healthcare services will rise, which attracts investors to the long-term growth potential of medical office real estate. Institutional funds and REITs are actively searching for larger healthcare deals and portfolios, and private capital is emerging as a major option in the $5 million to $20 million-price range and could begin to take a larger share of transactions this year, according to Marcus & Millichap’s National Medical Office Research report. A rise in crossover capital is also increasing competition for medical office properties as single-tenant retail investors target similar investment opportunities in this segment for higher yields. For-sale inventory is limited as medical office assets are in high demand with cap rates compressing over the past several years. On-campus medical office buildings command top cap rates, trading at sub-6 percent initial yields for single-tenant properties, while multi-tenant buildings draw first-year returns in the mid-6 to low-7 percent range, according to the report. Off-campus medical office properties with strong tenancy, which often include a healthcare system and long remaining lease terms, are in high demand. These properties fetch initial returns in the mid-6 percent area. …
PHILADELPHIA — Harrison Street Real Estate Capital has purchased two medical office buildings, located at 8001 and 8040 Roosevelt Blvd. in Philadelphia. An affiliate of George Comfort & Sons sold the properties, which total 86,000 square feet, for $17 million. The properties recently underwent renovations and were 94.7 percent leased at the time of sale. Thomas Jefferson University Hospital anchors the facilities. Ben Appel, Philip Mahler, Evan Kovac and Eric Anton of HFF represented the seller in the transaction.
NEW BRAUNFELS, TEXAS — The Silver Group has arranged the sale of a 2.1-acre parcel featuring a 12,000-square-foot facility at 244 Creekside Crossing in New Braunfels, a northern suburb of San Antonio. Christus Santa Rosa Healthcare most recently leased the property, which shares the intersection of Interstate 35 and FM 306 with the Town Center at Creekside and Resolute Hospital. The Silver Group represented both the buyer and the seller, whose names were not disclosed.