NEWPORT BEACH, CALIF. — Griffin-American Healthcare REIT II Inc. has acquired three Los Angeles-area hospitals and three medical office buildings located in Frisco, Texas and Jasper, Georgia for approximately $108.7 million. With the latest acquisitions, the REIT’s portfolio totals 121 buildings valued at approximately $1.1 billion, based onpurchase price, spread across 26 states.
The co-sponsors of the non-traded real estate investment trust (REIT) include Newport Beach-based American Healthcare Investors, an investment management specializing in the acquisition and management of healthcare-related real estate, and Los Angeles-based Griffin Capital Corp., a privately owned real estate company.
Non-traded REITs are considered public companies, but their shares are not listed on any stock exchange.
“Reaching the $
1 billion mark in aggregate portfolio value, based on purchase price, is a key milestone for Griffin-American Healthcare REIT II,” says Danny Prosky, a principal of American Healthcare Investors and president and COO of the REIT (pictured at left).
“Size and scale can be very important in terms of real estate portfolio operations, efficiency and potential enhanced value of the REIT as a whole,” adds Prosky. “The REIT has now grown to the size where it is one of the largest and most significant owners of healthcare-related real estate in the country.”
Since the start of this year, the portfolio has grown by approximately 149 percent, based on purchase price. Griffin American Healthcare REIT II maintains leverage of approximately 27 percent (total debt divided by total assets), among the lowest in the non-traded REIT industry as of Aug. 15, according to independent research firm Blue Vault Partners LLC.
The Griffin-American Healthcare REIT II property portfolio was 96.1 percent leased as of June 30, 2012, the with a weighted average remaining lease term of approximately nine years.
Newest acquisitions at a glance
The Los Angeles hospital portfolio is comprised of three general acute care hospitals, consisting of 416 beds across three campuses and totaling approximately 296,000 square feet of clinical space. The portfolio includes East Los Angeles Doctors Hospital, Memorial Hospital of Gardena, and Coast Plaza Hospital in Norwalk, Calif.
Each of the hospitals is master leased to operating affiliates of Avanti Hospitals LLC under a 15-year absolute net lease with two 10-year renewal options.
The Los Angeles hospital portfolio was acquired from Avanti Hospitals, an unaffiliated third-party represented by Kevin Roy of Healthcare Finance Partners. Griffin-American Healthcare REIT II financed the acquisition using $86.5 million in borrowings under its unsecured line of credit with Bank of America, N.A., and paid the remaining purchase price using cash on hand.
Frisco Medical Office Building is a two-story structure built in 2007 that consists of approximately 51,000 square feet in the Dallas suburb of Frisco, Texas. The medical office building is currently 94 percent leased to multiple tenants, the largest of which is Texas Health Resources. The building is located adjacent to the newly constructed Forest Park Medical Center Frisco, a 50-bed, state-of-the-art acute care hospital.
Frisco Medical Office Building was acquired from Caddis Partners, an unaffiliated third party represented by Cain Brothers. Griffin-American Healthcare REIT II financed the acquisition using $14.6 million in borrowings under its unsecured line of credit with Bank of America, N.A., and paid the remaining purchase price using cash on hand.
Mountainside Medical Building I and II are each one-story medical office buildings totaling approximately 37,000 square feet on the campus of the 42-bed Piedmont Mountainside Hospital in Jasper, Georgia. The buildings are currently 100 percent leased to multiple tenants, the largest of which is the adjacent hospital. In August, Griffin-American Healthcare REIT II acquired neighboring Mountainside Medical Building III.
Mountainside Medical Building I and II were acquired from Ziegler Healthcare Real Estate Fund II LLC, an unaffiliated third party represented by Chris Bodnar and Lee Asher of CBRE Inc.
Griffin-American Healthcare REIT II financed the acquisition through the assumption of an existing mortgage of approximately $6.3 million and paid the remaining purchase price using cash on hand.