AW Property Co. Recapitalizes Medical Office Portfolio for $170M

The 13-building medical office portfolio is 478,000 square feet and located across the State of Florida.

AW Property Co. has partnered with Invesco Real Estate to recapitalize a 13-builiding medical office portfolio in Florida for $170 million. The recapitalization included $96 million of debt financing through Capital One Healthcare.

Located in dense infill markets in Florida, including Palm Beach, Broward, Sarasota and Lee, the portfolio features two single-tenant properties and 11 multi-tenant properties. Sarasota Memorial Hospital, Baptist Health South Florida, Lee Health, Memorial Healthcare and HCA Healthcare are among the healthcare systems in the portfolio. At the time of the recapitalization, the portfolio had 97% occupancy.

According to AW, the recapitalization generated strong interest from “highly regarded real estate investors” in the US. The firm chose Invesco because the firm had “a common investment thesis” and would serve as “long-term stewardship of these assets,” according to Brian K. Waxman, managing director of AW.

Investors have been bullish on medical office for the last year. The pandemic proved medical office to have durability and duration of income, helping to stabilize the asset class through the most recent downturn. The investor interest has driven asset pricing up and compressed cap rates, but even with higher pricing, experts expect interest to remain high for the foreseeable future.

In Florida, the medical office investment market has been active since the onset of the pandemic. ShareMD purchased a three-building medical office campus in Miami, FL. The portfolio totals 177,358 square feet of medical space on ten acres of land. ShareMD purchased the properties from a private ownership entity. The acquisition was financed by a loan from Starwood Mortgage Capital, which was arranged by PSRS. In addition, WPB Medical Office, an affiliate of a local investment group, acquired West Palm Medical Plaza for $5.2 million. The three-story, 43,797-square-foot, multi-tenant property, located at 4700 N. Congress Ave., was 63% leased; occupied by seven medical-related tenants. The building is subject to a long-term ground lease. Situated on 5.1 acres of land, the medical office building was originally built in 1987 and underwent renovations in 2011.

In the 13-property sale, E. Hunter Beebe and William Earl of Kaufman Hall advised AW in the transaction.