Many veteran investors in medical office properties are familiar with LaSalle Investment Management. LaSalle, by many accounts, was the first institutional private equity investor to raise a fund focused on medical office properties. Steve Bolen joined LaSalle in 2000 to launch the MOB practice. They have ultimately invested in over 80 medical office buildings in a couple of dedicated medical office funds as well as some separate accounts and the firm’s core open end fund. All totaled, LaSalle has invested in about $1.3 billion of MOBs. LaSalle has recently sold some of it’s assets in MOB Fund II. This fund has closed on 2 separate groups and American Realty Capital’s Healthcare REIT II (NYSE: HCT) has been the buyer. This post will examine the second portfolio, most of which has been closed by ARC.
The 2nd portfolio involved 13 MOBs and 534,000 square feet in 5 states. The total aggregate price of this part of the deal was $136 million which works out to $256 per square foot. Per an 8K filed, the cap rate on the deal works out to 6.14%. The portfolio was 92% leased at the end of 2013 and Trinity Health of Michigan was the largest tenant, comprising 11% of the portfolio’s rental income. As part of the deal, HCT paid $343 per foot for the Bowie Gateway Medical Building in Bowie MD. The anchor tenant in this class A 36,000 square foot building is Anne Arundel Health System.
Here are the properties involved in the deal – click on the property name to see the respective Revista Property View Report. The properties without a link are not yet in our coverage area.
| Name | State | Square Feet | Purchase Price | PPsqft | Confidence | Affiliated? | On Campus? | Building Class |
| Arrowhead | AZ | 45,289 | $11,170,000 | $247 | Confirmed | Yes | Yes | A |
| 310 Lafayette | MI | 59,845 | $18,012,478 | $301 | Allocated | Yes | Yes | A |
| Bowie – AAHS | MD | 36,260 | $12,450,000 | $343 | Confirmed | Yes | No | A |
| Stockbridge Family Medical | GA | 19,822 | $3,120,000 | $157 | Confirmed | No | No | B |
| Village Center – Stockbridge | GA | 25,051 | $4,100,000 | $164 | Confirmed | Yes | No | B |
| Creekside | GA | 54,899 | $10,030,000 | $183 | Confirmed | Yes | Yes | A |
| Benedictine/Health Alliance St. Mary’s | NY | 35,461 | $10,673,247 | $301 | Allocated | Yes | Yes | B |
| New Paltz | NY | 50,000 | $15,049,275 | $301 | Allocated | Yes | No | A |
| New Windsor | NY | 48,448 | $11,590,000 | $239 | Confirmed | Yes | No | A |
| Plank Rd | NY | 25,308 | $4,530,000 | $179 | Confirmed | Yes | No | B |
| Cushing | NY | 43,308 | $13,200,000 | $305 | Confirmed | Yes | Yes | A |
| Singerlands I | NY | 42,800 | $10,600,000 | $248 | Confirmed | Yes | No | A |
| Singerlands II | NY | 47,800 | $12,175,000 | $255 | Confirmed | No | No | A |
