Jeffrey Busch
BETHESDA, MD—Locally-based Global Medical REIT has acquired the so-called IRF portfolio from affiliates of CNL Healthcare for $94 million. The net lease medical portfolio consists of four inpatient rehabilitation facilities located in Nevada, Indiana, Arizona and Oklahoma. Under the deal the properties have a an initial capitalization rate of approximately 7.3% and an estimated second-year capitalization rate of 7.6%, assuming the scheduled lease increases.
CEO Jeffrey Busch said in a prepared statement that the rent generated by the acquisition together with the underlying cash flows generated through its existing portfolio, will help create long-term stockholder value.
Earlier this week Global Medical REIT exercised $75 million of the $150 million accordion feature of its credit facility to help fund the acquisition. The partial exercise of the accordion feature increases the term loan component of the credit facility from $100 million to $175 million and the total borrowing capacity under the credit facility to $425 million.
The IRF portfolio is 207,204 square feet in total and leased to healthcare providers under long-term triple-net leases. Currently, all four leases have a weighted average remaining lease term of approximately 8.3 years and are expected to provide total annual rent of $6.9 million. The properties are in:
- Las Vegas, NV (Encompass Health)
- Surprise, AZ (Joint Venture between Cobalt Rehabilitation and Tenet Healthcare)
- Oklahoma City, OK (Joint venture between Mercy Health and Kindred Healthcare)
- Mishawaka, IN (St. Joseph's Health System)
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
