The end of 2015 and the beginning of 2016 has been tough month for investors. December saw the first increase in the fed funds rate in several years; the S&P 500 was down some 6%+ in January, the price of oil continues to plummet and concerns are abound in investment circles.
How about the health care real estate landscape? Coming off a year of record volume and pricing in the healthcare real estate world (the 2015 full year Revista Transactions report will be released in March to subscribers), one would think it would be impacted by some of the concerns listed above.
We have seen several trades since the Fedraise that signify to us the market is alive and well. A few of them are detailed below:
First Hill Medical Pavilion
In early January, the JV of Heitman/Nexcore closed on the purchase of the First Hill Medical Pavilion from Trammel Crow. Trammel Crow had repurposed the property as an MOB in the medically desirable First Hill (or Pill Hill, as locals call it) area of Seattle. The First Hill Medical Pavilion is 100% leased to Swedish Health Services, Seattle Medical Associates, CellNetix and Theraclone. The price paid was $199M which equates to $884 per square foot.
In December and January, Carter Validus Mission Critical REIT II closed on a $49.4M purchase in Oklahoma. Named the HPI Portfolio, CV REIT II disclosed that it paid $339 per square foot at a 6.4% yield for a community hospital, a surgical hospital and 2 MOBs in Oklahoma City and Edmund. Brown Gibbons Lang & Company represented the seller in the deal.
Life Science Plaza
In December, Life Science Plaza, 348,000 rentable square foot Class A property at the gateway of the Texas Medical Center in Houston was recapitalized. The property is fully occupied under long-term leases with critical life science, clinical and hospital tenants. Built in 2009, the LEED Gold property is a rare privately-owned, new construction building that is directly adjacent to the TMC, well-suited to the most demanding lab and healthcare users. JLL represented the owner in this transaction.
The Green at Florham Park
JLL Income property Trust paid $45.6M for the Green at Florham Park, a newly built 100,000 SF MOB in Florham Park, New Jersey. The property was 100% leased and purchased from the Rockefeller Group, a local developer. Stan Johnson helped to broker the deal.
Siena Heights Medical Office Portfolio
In December, CNL closed on the purchase of the Siena Heights MOB Portfolio, a portfolio of 3 buildings and 139,400 SF in Las Vegas. CNL paid $54,860,000 for the buildings which are located directly next to the St. Rose Dominican Hospital. Anchor tenants in the Medical Buildings include Dignity Health, Davita/Health Care Partners, and United Health, according to Greg Trainor of Fairfield Advisors who represented the seller in the deal. The price equates to $378 per SF.
For more information on these deals including all of the December and January blockbusters, please access Revista’s transaction comp tool.