Nuveen REIT Buys Healthcare Portfolio for $300M
Deal includes 10 buildings that have been sold to fund a recent merger of healthcare REITs.
Nuveen Global Cities REIT (GCREIT) has closed on the acquisition of a 10-building healthcare portfolio encompassing 661K SF in four markets for $300M. The properties are located in Atlanta, Pittsburgh, Tampa and Dallas.
The seller was not disclosed, but a statement on Nuveen’s website indicated that “the opportunity came from the merger of two large publicly traded healthcare REITs, one of which needed to sell a large portfolio to fund a portion of the merger.”
The largest merger of healthcare REITs this year, was the $18B deal in February that combined Healthcare Realty Trust and Heathcare Trust of America. In July, GlobeSt. Reported that Healthcare Realty Trust is preparing to sell $1.7B in assets, with proceeds from $1.1B of these divestures funding the merger with HTA.
According to GCREIT, the properties it acquired consists of newly renovated healthcare facilities that are 96% leased by 57 tenants. The portfolio has in-place average annual escalations of more than 2.5% and a 5.7-year weighted average lease term.
GCREIT said that tenant demand for space in the assets is robust, with the portfolio inking more than 65K SF in new leases and renewals since May.
The statement on Nuveen’s website said that within 10 miles of the acquired properties, the five-year projected population growth averages 9.7% overall and 27% for 65+ years and older, which compares favorably to the US average of 2.7% and 13.9%, respectively,
“The portfolio is in line with GCREIT’s goal to acquire high-quality, recession-resilient healthcare assets in select target markets,” said Richard Kimble, co-president of GCREIT, in a statement.
Kimble said nine of the 10 properties are leased to tenants with imaging, surgical and/or oncology build-outs.
The portfolio is part of GCREIT’s strategy to increase exposure to the healthcare sector in target US cities; the deal will increase the company’s allocation in the sector to 21%.
In an update released at the end of July, Nuveen reported that the Global Cities REIT grown to $2.57B in gross asset value, consisting of direct and indirect investments in 449 properties.
According to the update, GCREIT’s strategy continues to focus on durable income, diversification across property sectors and achieving long-term appreciation through active investment and asset management while providing a hedge against inflation.
“The REIT’s cash flow has maintained its quality and durability with high occupancy at 97% and stable rent collections of more than 95%.
GCREIT’s portfolio consists of a combined 88% allocation to industrial, housing and healthcare.