Artemis Buys 10-Asset Medical Office Portfolio

Artemis Real Estate Partners has purchased a 10-property, Class A medical office portfolio totaling 270,831 square feet in six states across the US.

The portfolio, which was acquired from a seller that preferred to remain confidential, comprises assets positioned near major hospitals or health centers in Salem, Ore.; Phoenix; Indianapolis; Cincinnati, Ohio; Atlanta; and Lancaster, Pa.

JLL Capital Markets, which announced the sale and financing of the medical office portfolio, says that approximately 50% of the portfolio is leased to investment-grade health systems, including Mercy Health, Novant Health and Penn Medicine Lancaster General Health.

The remaining tenants are local and regional physician practice groups across primary and secondary markets, many of which are in Certificate of Need states. JLL says these tenants have significant investment in their spaces that generally feature high acuity uses, including imaging centers, ambulatory surgery centers and cancer centers, as well as several other specialty practices.

The JLL Capital Markets team representing the seller included Ted Flagg, Andrew Milne, Vasili Davos, Kristina Patrk, Niema Beglari, Katya Golynko and Rachel Oates. JLL Capital Markets Daniel Turley, Tim Joyce and Anthony Sardo led acquisition financing efforts on behalf of Artemis.

“The portfolio garnered interest from a wide variety of investors,” Milne said in a prepared statement. “Artemis distinguished themselves early on and performed flawlessly throughout the process. Lenders also competed vigorously for the opportunity to provide financing with a bank ultimately stepping up to provide a very attractive rate and terms.”

Medical office buildings have become a target for investors during the pandemic. From March to November 2020, REITs in this space posted above-average returns of 40.4%—a metric owing in part to the fact that they collected above-average rents compared to other sectors, according to BTIG.