Healthcare Real Estate Transactions and New Construction
Welltower Announces Completion of Two Generation Medical Office Buildings Leased to Atrium Health.
The two (2) recently developed medical buildings in Charlotte, NC total over 280,000 square feet. The properties were completed in March 2021 and leased to Atrium Health under a 15-year lease. Pappas Properties, LLC is a Charlotte-based developer and strategic partner with Welltower on the planned 9-acre healthcare anchored, mixed-use campus.
BMO Harris Healthcare Real Estate Finance provides a $28.6 Million Credit for Kanye Anderson Real Estate and Remedy Medical Properties.
The portfolio consists of 4 facilities in New Mexico totaling 115,000 square feet and are currently 100% occupied to HealthCare Services, Inc. Kayne and Remedy have acquired 22.7 million square feet of medical office space, containing 571 buildings in 41 states. Together, they are the largest privately held, non-hospital affiliated owners of medical office buildings in the country.
Cincinnati Children’s Hospital Breaks Ground on New College Hill Facility.
The academic acute care children’s hospital has broken ground on a new behavioral health facility. The $99 million building will replace the current inpatient facility and total 160,000 square feet over five (5) stories, which is 68% larger than the current building and will feature private rooms for all patients. The new hospital is scheduled to open late 2023, though it is still $36 million short of its goal.
Healthcare Real Estate Trends – Transactions and Employment are Trending Upward
Montecito Acquires Surgical Facility in Suburban Cleveland.
The facility was an outpatient-oriented surgical medical building in the Cleveland suburb of Beachwood, Ohio. The two-story, 69,800 square foot medical center was built in 2019 and is 100% leased to an operating entity owned predominantly by two market-dominant health systems, Lake Health and University Hospitals. The facility specializes in orthopedics, spine, urology, general surgery, and pain management. The layout includes 8 operating rooms, 2 procedure rooms, and 25 patient beds. The hospital has a staff of more than 200 with 56 operating physicians.
Pinnacle Real Estate Group Assessment
The Healthcare Real Estate Market Continues Adjusting.
Healthcare employment has rebounded noticeably better than the broader job market. Medical offices were much more insulated from the declines in demand compared to that of other property types. Healthcare employment fell as much as 6.4% in 2020, but stable growth is to be expected over the next 5 years. The continuing implementation of telehealth will lead to a greater role in the healthcare sector, but the overall impact on medical office buildings most likely remains negligible. Medical properties are expected to see a rebound in demand this year as the COVID-19 virus subsides. Medical office investors are expecting good growth opportunities due to the levels of transactions and pricing being more flexible than other property types.
Christopher Louis, ASA, MAI