HUMBLE, TX-Grubb & Ellis Healthcare REIT II Inc. has acquired Humble Surgical Hospital for $13.1 million. The 30,000-square-foot surgical hospital, located in this Houston suburb, represents the REIT’s fifth hospital buy this year.
Grubb & Ellis Healthcare REIT bought the single-story facility from Humble REP LLC, a joint venture partnership comprised of PinPoint Commercial, a Houston-based healthcare developer, and the physician group that operates the surgical hospital. The class A facility, which opened in August 2010, is fully leased to Humble Surgical Hospital LLC for a period of 15 years under an absolute net lease.
“We’ve seen a lot of deals like this where the developer needs to take the money and reinvest in core business,” says Danny Prosky, president and COO of Grubb & Ellis Healthcare REIT II. “The sources of our acquisitions have been very developer-heavy.”
Prosky tells GlobeSt.com the REIT focuses heavily on cash flow to rent coverage when it is evaluating and underwriting these types of investments. “We want to make sure our tenant is generating sufficient cash flow to cover our rent, and we’re very pleased with the cash flow to rent coverage at this facility,” he contends, adding that the tenant is an established group with long history of operations.
Located at 1475 FM 1960 East Bypass, Humble Surgical Hospital is a multi-specialty, physician owned medical center that replaced an older, existing facility. The hospital has the capacity to treat more than 1,000 cases per month and can provide comprehensive medical care.
The facility includes six state-of-the-art operating rooms and two procedure rooms in which a variety of surgical services are performed, including: orthopedics, ophthalmology, podiatry, plastic surgery, pain management, chiropractics, spine and gastroenterology. Among other amenities, Humble Surgical Hospital offers private post-surgical care rooms, wireless internet connectivity, convenient and plentiful parking and professional catering services.
Grubb & Ellis Healthcare REIT II financed the acquisition using borrowings under its line of credit with Bank of America, N.A., cash proceeds received from its offering and a $9 million loan provided by American Momentum Bank.
Henry Hagendorf and Beth Young of Grubb & Ellis Company’s Houston office represented the seller in the transaction.
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