Savills closes $1.3 billion in medical office deals across the United States

Savills has closed and advised on five transactions valued at $1.3 billion over the past eight months. "Medical real estate holds tremendous appeal for a wide range of capital sources, such as public and private REIT's, private funds, offshore investors, pension funds and family offices," said Jeffrey Cooper, executive managing director of the Savills Healthcare Real Estate Group. "Thanks to our sophisticated understanding of both capital markets and healthcare real estate, Savills has rapidly emerged as the industry's leader in healthcare real estate investment advisory services." In a transaction valued at over $380 million, Savills managed the sale of a majority interest in a 2.2 million s/f medical office portfolio for an institutional pension fund advisor on behalf of its clients. The portfolio consists of 38 buildings, all affiliated with leading hospitals, situated in a mix of on-campus and off-campus settings around the United States. The assets were acquired by a REIT. In a second deal, Savills managed the $406 million acquisition of a national portfolio by another REIT. The transaction encompassed 12 medical office buildings totaling 1.1 million square feet in size. Confidentiality requirements prohibit disclosure of principals involved in the transaction. In the third transaction - which represents one of the largest hospital monetizations in the last several years - Savills served as exclusive financial advisor to Scottsdale Healthcare. The $81.4 million monetization encompassed eight medical office buildings representing a total of 395,000 s/f in Scottsdale, Arizona. The properties, acquired by HCP, are situated on the Osborn, Shea and Thompson Peak campuses of Scottsdale Healthcare. VWP Realty, LLC served as local broker for the transaction In the fourth transaction, the Savills medical investment team advised HSA PrimeCare on the sale of a four-building medical office portfolio in Illinois. Griffin-American Healthcare REIT acquired the properties, which total 150,179 s/f. Two of the venues are located in Champaign-Urbana, and the other two are situated in the greater Chicago area. Finally, the Savills medical investment team is currently advising an institutional owner regarding its strategic alternatives regarding a 1.5 million s/f portfolio of medical office buildings located nationwide. "Capital sources appreciate the secure cash flow stream and high rates of tenant renewals offered by medical office buildings," said Cooper. "Investors also understand how declining reimbursement rates for in-patient healthcare delivery are helping to steadily elevate use of outpatient health services and facilities where the services are delivered. And hospital systems themselves are turning more and more to third party capital so they do not have to invest their limited capital in non-mission-critical buildings."