Healthcare Realty Trust has generated approximately $400 million of proceeds from joint venture and asset sale transactions year-to-date. More is coming too: asset sale and JV transactions under contract or LOI that are now expected to increase proceeds to over $1 billion. The majority of these transactions are expected to be completed in the third quarter.
Some of these deals fall under Healthcare Realty’s JV with KKR, to which the private equity giant has committed an additional $600 million. Additional property contributions are expected to generate $100 million in proceeds for the REIT next month, increasing the value of the JV to approximately $500 million.
Another JV that is driving sales is Healthcare Realty’s expanding relationship with Nuveen Real Estate, which has previously been referred to as TIAA. Healthcare Realty expects to contribute approximately $400 million of assets to a new Nuveen JV in two phases at a cap rate of approximately 6.6%.
In the first phase, which is expected to be completed in August, Healthcare Realty will contribute eight of its existing properties to the new Nuveen JV at a value of $193 million. Nuveen will fund a contribution equal to 80% of the equity value. Healthcare Realty will retain a 20% equity interest and will continue to oversee day-to-day operations and leasing of the properties.
The JV, whose closing is subject to financing and customary conditions, is expected to utilize secured financing of approximately 40% of the contributed value.
The REIT plans to use the $1 billion in proceeds it is expecting to fund share repurchases, according to CEO Todd Meredith.