Chestnut Healthcare, Fort Street Form $150M JV
The duo will focus on core and value-add investments in medical office buildings across Utah.
Fort Street Partners and Chestnut Healthcare Real Estate have formed a programmatic joint venture to acquire and develop up to $150 million in assets over the next four years. The duo will focus on core and value-add investments in outpatient medical and surgery centers in the Greater Salt Lake City area.
JLL Capital Markets arranged the venture between the two firms, which have previously collaborated on at least two other Utah deals last summer.
In June, Fort Street Partners secured the equity for a 20,399-square-foot medical project in Syracuse, Utah, through Chestnut Healthcare. Located at 3000 W. Antelope Drive, the development is scheduled to come online later this year and is fully preleased to three regional physician groups.
READ ALSO: Challenges Create Opportunities, Says MOB Investor
A month later, the two companies obtained equity placement for the Eagle Mountain Medical Center development, a 24,655-square-foot medical building at 4263 N. Pony Express Parkway in Eagle Mountain, Utah. The two-story facility is expected to come online toward the end of this year.
JLL Capital Markets Director CJ Kodani and Managing Director Mark Root led the team that arranged the joint venture.
MOB sector remains steady
The medical office real estate sector is on an upward trajectory, with a Savills report forecasting a 26 percent rise in outpatient demand over the next decade, primarily due to the aging population, and despite the current economic uncertainties affecting the commercial real estate sector.
Economic incentives, particularly decreasing interest rates, are anticipated to boost MOB investment going forward. However, the medical labor market is far from keeping pace, with the sector facing a significant shortage of specialists, especially physicians and nursing staff.
You must be logged in to post a comment.