Seavest divests 8-property MOB portfolio.
Sale of assets in the South and Southwest to Grubb & Ellis Healthcare REIT II
Sale of assets in the South and Southwest to Grubb & Ellis Healthcare REIT II reflects firm's strategy to unlock value after achieving its long-term investment objectives
WHITE PLAINS, N.Y., May 16, 2011 ¨C Seavest has closed on the sale of an eight-property medical office building (MOB) portfolio for about $30 million, or about $192 per square foot. The buyer was Grubb & Ellis Healthcare REIT II Inc.
The master-leased, on-campus MOBs, which total 156,220 square feet, had been part of the Seavest Properties I LLC investment fund since they were developed by the company in 2000-02.
We are very pleased about this transaction, which epitomizes Seavest's strategy for our healthcare real estate funds,¡± says Douglas Ray, president of the White Plains-based investment management firm. We provide our hospital and health system partners with long-term, stable ownership and consistent, quality management to help them meet their strategic goals. We believe this strategy best aligns our interests and creates long-term value for our investors.
The eight MOBs are in Alice, Lufkin, Victoria and Wharton, Texas; Carlsbad and Hobbs, N.M.; Hope, Ark.; and Lake Charles, La. The Lake Charles site also includes land for possible future development. (Please see attached ¡°Fact Sheet¡± for additional details.)
All of the MOBs were developed by Seavest and its construction partner on a programmatic basis for Triad Hospitals Inc. The developments were part of Triad¡¯s larger plan to expand hospital services and physician recruitment on many of its campuses.
The MOBs were originally master-leased to Triad for terms ranging from 12 to 15 years and are located on land leased from the hospitals. Three of the properties were later sold by Triad to Signature Hospitals (Wharton), Christus Spohn Health System (Alice) and Shiloh Health System (Hope). The other five properties are on the campuses of hospitals now operated by Community Health Systems Inc. (NYSE: CYH), which acquired Triad in 2007.
Seavest¡'s construction partner for the MOBs was the former Mediplex Medical Building Corp. (MMBC).
Amid all the merger and acquisition activity with these hospitals, Seavest has been the constant, Mr. Ray notes. ¡°We owned these assets for approximately 10 years,¡± he says. ¡°We were, are and will continue to be long-term holders of healthcare real estate.¡± Several other properties remain in the Seavest Properties I fund, and the firm is actively acquiring and developing assets for its two other healthcare real estate funds.
The sale to Grubb & Ellis was a private transaction. Although Seavest executives say they considered a formal marketing process, Mr. Ray says they found ¡°a robust and active market¡± for the properties and were able to leverage their existing relationships to facilitate an off-market deal.
About Seavest Inc. Established in 1981, Seavest Inc. is a real estate investment management firm focused on funding the development of, acquiring and asset managing healthcare real estate assets. A pioneer in this sector, Seavest made its first healthcare real estate investments in the mid-1980s. Today, the firm controls a significant portfolio of medical office space and manages three healthcare real estate investment funds. For more information, please visit www.SeavestHCP.com or call (914) 683-8474.
About Grubb & Ellis Healthcare REIT II Inc. Grubb & Ellis Healthcare REIT II Inc. intends to qualify as a real estate investment trust that seeks to preserve, protect and return investors' capital contributions, pay regular cash distributions, and realize growth in the value of its investments upon the ultimate sale of such investments. Grubb & Ellis Healthcare REIT II is seeking to raise up to approximately $3 billion in equity and to acquire a diversified portfolio of real estate assets, focusing primarily on medical office buildings and other healthcare-related facilities.
Grubb & Ellis Healthcare REIT II is sponsored by Grubb & Ellis Company (NYSE: GBE). Grubb & Ellis is one of the largest and most respected commercial real estate services and investment companies in the world.
Seller: Seavest Properties I LLC
Buyer: Grubb & Ellis Healthcare REIT II Inc.
Broker: None. Private transaction.
Sale price: $30,050,000
Price per square foot: $192.36
Closing date: May 12, 2011
Properties included in the transaction:
- 2510 and 2520 E. Main St., Alice, Texas. Two single©\story buildings totaling 24,600 square feet on the campus of Christus Spohn Health System¡¯s Christus Spohn Hospital Alice.
- 2420 W. Pierce St., Carlsbad, N.M. A two©\story, 24,500 square foot MOB on the campus of Carlsbad Medical Center, which is operated by Community Health System (CHS).
- 5419 N. Lovington Hwy., Hobbs, N.M. A single©\story, 15,000 square foot property on the campus of CHS¡¯s Lea Regional Medical Center.
- 302 Bill Clinton Dr., Hope, Ark. A one©\story, 9,600 square foot MOB on the campus of Shiloh Health System¡¯s Medical Park Hospital.
- 1920 West Sale Rd., Lake Charles, La. A single-story, 15,000 square foot property on the campus of CHS¡¯s Women and Children¡¯s Hospital. Also includes a development site.
- 302 Medical Park Dr., Lufkin, Texas. A single©\story, 15,500 square foot MOB on the campus of CHS¡¯s Woodland Heights Medical Center.
- 110 Medical Dr., Victoria, Texas. A single©\story, 33,000 square foot property located on the campus of CHS¡¯s De Tar Hospital North.
- 2112 Regional Medical Dr., Wharton, Texas. Two single©\story MOBs totaling 20,000 square feet on the campus of Signature Hospital¡¯s Gulf Coast Medical Center.