Healthcare: Hospital MOB Portfolio Sells for $163M
By Carl Cronan for GlobeSt.com
A medical office building portfolio belonging to a local hospital has traded for $162.8 million in a combined sale and partial leaseback transaction. New York City-based Healthcare Real Estate Capital terms it as the largest such transaction of its type.
The group of 16 buildings totaling 855,376 square feet was purchased from the Greenville Hospital System by Scottsdale, AZ-based Healthcare Trust of America Inc., formerly known as Grubb & Ellis Healthcare REIT. GHS hired HRE Capital to market the properties, which garnered offers from 16 investment groups.
“This is probably the largest hospital/medical office monetization in our memory,” Hunter Beebe, principal of HRE Capital, tells GlobeSt.com. “This is a unique situation in the size of the portfolio, the quality of the hospital from financial and credit rating standpoints, and the quality of the real estate itself.”
The Greenville Hospital portfolio, including the Patewood Medical Campus, sold for approximately $190 per square foot at a reported cap rate of 8%. Other MOBs around the country have sold for at least $300 per square foot, though Beebe says those prices are based primarily on rents charged.
“There is not a better portfolio owned by a hospital anywhere,” he says. “This is a very prominent situation for both the buyer and seller.”
Scott Peters, president and CEO of Healthcare Trust, stated in a release that the acquisition is a great accomplishment for the REIT: “This strategic relationship will allow us the opportunity to develop and/or acquire additional medical buildings as Greenville expands its first-class health system.”
In addition to the purchase of the buildings, Healthcare Trust agrees to pay annual ground lease payments of $880,000. Both parties have also agreed to work together on a variety of future MOB developments that could be valued at more than $75 million.
Greenville Hospital System is the city’s largest healthcare provider, with four acute-care hospitals 11 specialty facilities and 1,000 physicians serving more than a million area residents. The system has total assets of $1.3 billion and annual revenue of at least $1.1 billion, along with a AA credit rating by Fitch.
HRE Capital is a national advisory firm focused on healthcare real estate. It cites more than $3 billion in assignments throughout the US.