Seavest Healthcare Closes $1B MOB Portfolio Recap

Kirkwood Professional Plaza, Dearborn, Mich. Image courtesy of Seavest Healthcare Properties LLC

Seavest Healthcare Properties LLC ended 2021 with the completion of a significant portfolio recapitalization. Seavest closed on a new partnership transaction valued at $1 billion, bringing in Nuveen Real Estate as co-owner of an unidentified segment of the health-care real estate investment firm’s collection of medical office buildings in the U.S.

The motivation for the portfolio recapitalization is unclear. Seavest is remaining mum on the specifics of the transaction, declining to go on record with any additional information beyond that provided in its press release on the deal, which closed in December 2021. The company notes only that the portfolio consists of high-quality, strategically located MOBs.

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Active in the health-care real estate sector since 1981, Seavest has long been a respected investor in MOBs, outpatient facilities and specialized treatment centers. The company not only acquires existing assets, but also partners with developers in joint ventures to build new properties for health systems across the U.S.

Notable investments in 2021 included the acquisition of 902 Quentin Road in Brooklyn, a fully leased, 72,300-square-foot MOB that counts NYU Langone Health and Touro College of Health Sciences as anchors. Seavest and joint venture partner Mortenson also topped out on the construction of the 118,000-square-foot Providence Family Wellness Center and Medical Office Building near downtown Portland in South Hillsboro, Ore., last summer.

Seavest has also invested in value-add projects, such as Kirkwood Professional Plaza in Dearborn, Mich. In a joint venture with Kirco Health Partners, the company acquired the former home of automotive parts supplier Visteon in 2011, with plans of repurposing the asset. Two years later, the partners had transformed the 140,000-square-foot property at 5500 Auto Club Dr. into a Class A outpatient medical center.

Trend extension

Seavest’s billion-dollar deal with Nuveen may be among the first of many health-care real estate recapitalizations to come in 2022, as there was no shortage of such transactions in 2021. The deals ranged in size from smaller collections of assets to major portfolios. In September 2021, Montecito Medical Real Estate recapitalized a 545,800-square-foot group of 31 MOBs with AEW Capital Management in a transaction valued at $245 million. In another deal, KKR and Cornerstone Cos. Inc. formed a joint venture to acquire and develop $1 billion in health-care properties across the U.S. and seeded the portfolio with the recapitalization of 25 Cornerstone health-care properties totaling approximately 713,700 square feet.

In terms of deals on the higher end of the monetary spectrum in 2022, hints of a continuation of the recapitalization trend may already be appearing. In addition to Seavest’s news, in mid-January, National Real Estate Advisors and joint venture partner Catalyst Healthcare Real Estate closed the acquisition and recapitalization of two health-care portfolios totaling 1.2 million square feet for $420 million.