Physicians Realty Trust Closes $750M Deal

UF Health Jacksonville North

Physicians Realty Trust has acquired a 14-building medical office portfolio from Landmark Healthcare Facilities for approximately $750 million, in an off-market transaction.

Spread across eight states, the Class A medical facilities totaling roughly 1.4 million square feet were 95 percent leased at the time of sale. The REIT will continue to partner with Landmark in the property and facility management of the traded assets.

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With most assets in Michigan and Florida, the portfolio comprises:

• the 200,583-square-foot UF Health Jacksonville North in Jacksonville, Fla.
• the 164,186-square-foot Baptist Medical Center Belhaven in Jackson, Miss.
• the 141,205-square-foot Burns POB (professional office building) in Petoskey, Mich.
• the 121,834-square-foot TGH Brandon Healthplex in Brandon, Fla.
• the 100,490-square-foot Beaumont POB in Sterling Heights, Mich.
• the 99,055-square-foot Lafayette MOB in Lafayette, Lou.
• the 94,572-square-foot Beaumont Health and Wellness Center in Rochester Hills, Mich.
• the 90,156-square-foot Hospital Hill MOB in Kansas City, Mo.
• the 89,159-square-foot Raritan Bay Medical Center in Old Bridge, N.J.
• the 85,582-square-foot Saint Vincent MOB in Erie, Penn.
• the 81,312-square-foot Riverside MOB in Hampton, Va.
• the 73,453-square-foot Bay City MOB in Bay City, Mich.
• the 57,040-square-foot Beaumont Grosse Point MOB in Grosse Pointe, Mich.
• the 36,045-square-foot Yulee MOB in Yulee, Fla.

Each facility is part of a hospital campus or affiliated with a health system; furthermore, 75 percent of the leased space has investment-grade health systems or their subsidiaries as tenants.

Grounds for new relationships

Considered to be the largest single transaction in the company’s history, the Landmark portfolio acquisition was originally announced in October. The initial deal included 15 medical facilities with a total price tag of approximately $764.3 million. However, a 24,972-square-foot property in Deltona, Fla., was ultimately excluded from the sale as its tenant chose to exercise its Right of First Refusal.

The deal helped Physicians Realty Trust establish 10 new health system relationships, including the University of Florida Health, Beaumont Health, Hackensack Meridian Health, Baptist Health Systems, McLaren Health Care and Allegheny Health.