PHILADELPHIA AND RESTON, VA. — Grosvenor has reported two items of investment news, forming a $600 million partnership to invest in healthcare, as well as purchasing a 250,000-plus-square-foot office building outside Washington, D.C., in an unrelated transaction.
Notably, Grosvenor Investment Management US, Inc. (GIM), Grosvenor's real estate investment management platform in North America, has formed an investment partnership with Kuwait Finance House (KFH) to invest in up to $600 million of U.S. healthcare-related real estate.
Resulting from the agreement, the partnership will target the acquisition and development of private-pay senior living facilities and medical office buildings in the U.S. during the next 7 years. These investments will result from the formation of equity joint ventures with local and regional operating and development partners. GIM will oversee all investment activities, including sourcing, underwriting, structuring, financing, closing, asset managing, and exiting the partnership’s investments, all of which will comply with Shari’ah (Islamic law).
“The formation of this partnership reflects the strength of the U.S. healthcare sector, which is expected to benefit from attractive demand/supply characteristics, driven by favorable demographic trends and limited supply growth,” said Eric Cannon, Director of Acquisitions, GIM. “During the recent economic downturn, the sector’s cash flows have proven more stable and less correlated with the overall business cycle than other major property types.”
“We are very excited to continue investing with Grosvenor to expand our portfolio into this sector. Growing healthcare expenditures both in absolute terms and as a percentage of GDP, coupled with increasing average life spans, are likely to drive demand for this sector well into the future,” stated Ali O. Al-Ghannam, Head of the International Real Estate Department of KFH.
This is GIM’s second investment partnership with KFH. Between 2004 and 2007, GIM sourced, structured, closed, and asset managed KFH’s first investment in the U.S. healthcare sector, acquiring a total of 15 New England senior living properties in a joint venture with Benchmark Assisted Living of Wellesley, Mass. As reported by The Wall Street Journal, GIM sold the 1,174-unit portfolio in November 2007 for $268 million to GPT Group of Australia.
——————
Additionally, in an unrelated transaction, Grosvenor Americas has acquired The Campus at Sunrise in Reston, Va., a property comprising three low-rise office buildings totaling 254,453 rentable square feet. BPG Properties, Ltd. of Philadelphia sold the property for approximately $63 million. Rick Siegel and Paul Hanatin of West, Lane & Schlager Realty Partners represented both parties in the transaction. This property adds to the approximately 1.5 million square feet of office, retail and hotel space within Grosvenor’s Washington, D.C.-area portfolio.
Originally developed between 1987 and 1989, the 11-acre property’s three buildings are located at 11130, 11180 and 11190 Sunrise Valley Dr., totaling 67,354 square feet, 78,622 square feet and 108,477 square feet, respectively. The Campus is currently leased to a mix of tenants including technology, consulting, financial services and government contracting firms. The property is located a half mile from the future Wiehle Avenue Metro station, part of the Metro’s Silver Line extension through Tysons Corner, scheduled to open in 2013.
— Dan Marcec