NEWPORT BEACH, CA-Continuing to expand and diversify the portfolio of Griffin-American Healthcare REIT II, American Healthcare Investors and Griffin Capital Corp. here have announced that the REIT has acquired Bellaire Medical Center in Houston and a three-building portfolio of senior-care facilities in Massachusetts for an aggregate purchase price of roughly $47.6 million. The purchase brings the REIT's total portfolio to 125 buildings valued at approximately $1.14 billion, based on purchase price, diversified across 27 states.
Bellaire Medical Center, a 216-bed, 161,000-square-foot, long-term acute-care center and behavioral rehabilitation hospital in the Houston suburb of Bellaire, was purchased directly from 5314 Dashwood LP, an unaffiliated third party. GAHR II financed the acquisition using $23.5 million in borrowings under its unsecured line of credit with Bank of America N.A., and the remaining using cash on hand.
The hospital sits on a full city block four miles west of Texas Medical Center, considered the world's largest medical facility, composed of 45 million square feet of specialty hospitals, research facilities and wellness and prevention clinics. Originally built in 1978, BMC has undergone multiple renovations, upgrades, expansions and remodels and has received approximately $6 million in improvements, with an additional $6.8 million slated to be invested to further expand the facility.
The center is 100% leased to Cornerstone Healthcare Group, which operates a 140-bed long-term acute-care hospital at the medical center, and Ascend Health Corp., which operates a 76-bed in-patient behavioral rehabilitation hospital onsite. The Ascend Hospital is currently undergoing an expansion that will increase the number of beds to 126. Both tenants are signed to long-term triple-net leases.
Massachusetts Senior Care Portfolio, a three-building portfolio composed of skilled-nursing and assisted-living facilities in Boston and Dalton, MA, was purchased directly from Merrimack Health Group Inc., an unaffiliated third party. The off-market transaction was financed with $22 million in borrowings under GAHR II's unsecured line of credit with Bank of America N.A. and the remaining using cash on hand.
The Massachusetts portfolio totals 201 beds and approximately 104,000 square feet of space and is master leased to Trinity Health Systems LLC under an absolute net lease through 2027 with 3% annual rent escalations. Additionally, the lease includes four 10-year renewal options.
According to Danny Prosky, a principal of AHI and president and COO of the GAHR II, the REIT “has nearly tripled in size since the start of 2012, based on aggregate purchase price. Our portfolio represents a broad spectrum of clinical healthcare real estate—medical office buildings, hospitals, skilled-nursing facilities and assisted-living facilities.”
As Real Estate Forum previously reported, the senior executives that had been in charge of managing Grubb & Ellis Healthcare REIT II started American Healthcare Investors to co-sponsor the REIT and renamed it Griffin-American Healthcare REIT II shortly before Grubb filed for bankruptcy. The team has now been together for approximately six years and has collectively acquired and managed $3.5 billion worth of healthcare properties on behalf of thousands of investors.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
