HCP, Inc. (NYSE: HCP), disclosed with the reporting of second quarter, 2015 earnings that it had purchased a portfolio of 11 on campus medical office buildings from Memorial Hermann Health System. These MOBs comprise 1.2 million square feet and are located on the campuses of Memorial Hermann Northwest, Southwest and The Woodlands. HFF had marketed the properties earlier this year.
HCP paid $225M for the portfolio, or a blended $187 per SF. Memorial Hermann is subject to a master NNN lease for the properties. HCP reported the economic triple net lease yield at 5.7%. This sounds akin to a nominal cap rate (which is widely reported) as a NNN lease should make Memorial Hermann responsible for capex. The initial rent for this deal works out to $11 per SF with 2% annual escalators. With the deal, HCP becomes Memorial Hermann’s largest landlord.
Here are a few properties involved in the deal.
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