Remedy, Kayne Anderson Acquire MOB Portfolio

Key-Whitman Eye Center. Image courtesy of CBRE

Remedy Medical Properties and Kayne Anderson Real Estate have added another eight medical office buildings to their joint portfolio. The joint venture partners acquired a collection of assets that spans four states for $91 million from Spruce Healthcare.

The portfolio totals 177,000 square feet with five of the properties located in Florida and one each in Texas, North Carolina and Tennessee. The portfolio is fully leased and has 11 years of weighted average lease terms with two-thirds of the tenants being in orthopedics, oncology and imaging practices. The remainder of the tenants are in the ophthalmology and dermatology practices, both with ambulatory surgery centers.

CBRE’s Lee Asher, Chris Bodnar, Jordan Selbiger, Ryan Lindsley, Cole Reethof, Sabrina Solomiany and Zack Holderman represented Spruce Healthcare in the transaction. Asher, vice chairman at CBRE, said in prepared remarks that they needed to find a buyer with the flexibility to close on the complex transaction since it included multiple loan assumptions.

Major joint investment into medical offices

Two months ago, Remedy and Kayne Anderson also acquired the majority interest in another medical office portfolio. The joint venture partners purchased the stake in a more than 1 million-square-foot portfolio totaling 23 properties spread throughout 12 states from MedProperties. Before that, Remedy and Kayne Anderson partnered to buy a four-building medical office campus totaling 100,419 square feet in Gresham, Ore.

Overall, the medical office sector has been more resilient than traditional offices throughout the market downturn, according to an outlook from Marcus & Millichap for 2022. The report noted that there’s currently strong tenant demand for medical offices, spurred by appointments resuming and the need from an aging population. The demand is expected to lead to a slight increase of 2.5 percent in asking rent this year, while vacancy will drop to 9.2 percent. The report also expects 9 million square feet of medical offices to open in 2022, but noted the ongoing materials and labor shortage.