CHICAGO and BOCA RATON, Fla., Jan. 4, 2023 – Joint venture (JV) partners Remedy Medical Properties and Kayne Anderson Real Estate announced today that they have acquired a high-quality, fully leased medical office portfolio consisting of 13 properties in eight states, totaling 300,328 square feet, from Montecito Medical. The $131 million transaction closed in late December.
Principals of Chicago-based Remedy and Boca Raton, Fla.-based Kayne Anderson Real Estate, the nation’s largest owners of medical properties, say this is a significant, strategic acquisition consisting of properties that are well positioned for continued success.
“The properties in the portfolio are ideally located in strong, growing markets with excellent demographics,” says Peter Westmeyer, Founder of Remedy. “The Clarksville, Tenn., medical building, for example, is located in close proximity to Nashville in an area experiencing significant growth. The Precision Spine practice in the Tyler, Texas, property is one of the few spine and pain management practices in the area, enabling it to garner significant market share. All of this bodes well for the tenants to continue to grow and thrive.”
“The properties are all 100 percent leased to experienced, highly-regarded physicians and health systems with excellent track records, strong patient bases and, in some cases, nationally-renowned parent companies,” says Joe Magliochetti, Chief Investment Officer for Remedy.
“A case in point is Optum-Marsh, which is located in the Indianapolis property. Optum-Marsh, which is owned by United Health’s OptumCare, is a strong investment grade tenancy and a dominant practice in the area. Another is the Halo Chico Breast Center in Chico, Calif. The building is 100 percent leased and has an exceptional remaining lease term of 14.3 years.
“And the list goes on. We are pleased to have such high-quality, prominent healthcare tenants in our properties and look forward to their continued success.”
The portfolio is 100 percent leased on a long-term basis with a weighted average lease term (WALT) of 10.4 years. The practices in the buildings represent a wide range of medical specialties, including orthopedics, neurology, gastroenterology, radiology, imaging and surgery. Jordan Young Institute, an orthopedic practice in Virginia Beach, Va., and Indianapolis-based Optum-Marsh, which provides general surgery, family medicine and other medical services, are managed by a third party via a vendor agreement. The other buildings are self-managed.
Newmark served as the broker for the transaction.
About Kayne Anderson Real Estate
Kayne Anderson Real Estate (“KA Real Estate”) is a leading real estate private equity investor in medical office, senior housing, off-campus student housing, multifamily housing and self-storage. KA Real Estate manages $14.5 billion of real estate AUM across opportunistic equity and real estate debt. KA Real Estate is part of Kayne Anderson Capital Advisors, L.P., a $34 billion alternative investment management firm with more than 38 years of successful experience in the real estate, infrastructure, credit, and growth capital sectors (as of 9/30/2022).
Remedy Medical Properties is a full-service healthcare real estate company and the largest private owner of healthcare properties in the country, with over 26 million square feet and 25 offices spanning 43 states. For healthcare decision-makers who want to maximize the value of their real estate while enhancing their ability to adapt, our national presence enables us to offer the right solutions in the right locations for your organization. Remedy offers unmatched flexibility in every client engagement, and our adaptability enables us to provide more options in ownership, development, leasing, management, and strategy. Our willingness to commit capital, share more risk, and offer greater foresight results in greater resilience, profitability, and peace of mind for our clients.