A holding from the portfolio.
CHARLOTTE, NC—MBRE Healthcare and Kayne Anderson have purchased a portfolio of 10 medical office buildings near Charlotte and Winston-Salem, N.C., from Heitman and its equity partner Montecito Medical Real estate. Ben Appel, managing director of JLL Capital Markets, part of the team that represented the seller, tells GlobeSt.com that the 218,213-square foot portfolio traded for $103.5 million.
The portfolio is 100% leased to OrthoCarolina, the 3rd largest orthopedic provider in the nation by physician count, with a weighted remaining lease term of 13 years. Three of the buildings feature ambulatory surgery centers with two operating rooms each. 60% of the properties are in the Charlotte MSA, the 23rd largest MSA in the country, with two properties located in Winston-Salem and one each in Laurinburg and Shelby. All portfolio properties are within 2.2 miles of the nearest hospital.
"This gives instant scale both in the Charlotte MSA, as well as scale of the relationship with OrthoCarolina," Appel said. "That was attractive to the investors, so it drove a lot of activity. We had a number of groups bidding and had a dozen offers."
Appel says North Carolina is a hot market, which put this portfolio on the radar screen of a lot of investors. Also making the deal attractive, he says, is that it is a long-term lease to a healthcare provider. The 13-year lease hedges against market risk over the next few years, making adding to its attractiveness, he says.
Appel says the buildings are about half the size of the average medical building, but were attractive nonetheless.
"Ownership structured an attractive lease and a desirable physician joint venture that bolstered the marketing of the assets. MBRE did a great job continuing the joint venture relationship with the physicians," said Ben Kovac, a JLL Capital Markets managing director, who was also part of the team representing the seller.
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