Remedy, Kayne Anderson Pay $252M for MOB Portfolio
The 37-property ensemble is fully leased to 40 tenants.
A joint venture of Remedy Medical Partners and Kayne Anderson Real Estate has acquired a 37-property medical office portfolio. The collection is spread across 13 states and encompasses a total of more than 700,000 square feet. Broadstone Net Lease sold the fully occupied assets for $252 million. JLL brokered the transaction.
The partnership received a $175.6 million acquisition loan for the deal, provided by BMO Healthcare Real Estate. The financing includes capital allocated for value enhancement and future leasing at the properties.
The portfolio features ambulatory surgery centers, surgical hospitals, multi-specialty clinics, in-patient rehab facilities and imaging centers, among others. The largest property in the collection is the 120,000-square-foot Ridgeway Medical Campus. The facility is located in Greece, N.Y., and is fully leased to Rochester Regional Health.
Stable tenancy across the portfolio
At the time of the sale, the ensemble had roughly 40 tenants, including Emerge Ortho, Advocate, IU Health, Tampa Health, Froedert Health, TGH Imaging and USPI. The new owner already started the process of lease extensions, according to Lee Asher, senior managing director with Kayne Anderson. Asher also mentioned that current high costs are among the influencing factors of renewal upon lease expiration. Experts agree that in what is now a mainstream investment sector, long-term occupancy is among the key factors that makes the medical office market resilient.
The properties are concentrated in markets such as Chicago, Houston, Charlotte, Seattle, Indianapolis, Milwaukee, Tampa, Fla., and Arlington, Texas. In the first quarter of 2024, the joint venture also expanded its footprint in metros such as Phoenix, Chicago and South Florida and paid $86 million for a 181,000-square-foot property collection, encompassing four medical office buildings.
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