MedProperties Holdings LLC, a Dallas-based private equity firm that invests exclusively in healthcare real estate, has snapped up more than 15 properties worth more than $230 million, including a freestanding, in-patient rehab hospital in Arlington.
MedProperties’ purchase of the so-called Harrison Street Portfolio consists of 17 properties in 10 states totaling 620,750 square feet. So far, the firm has closed on 16 of the 17 properties, and it plans to close on the remaining one by year’s end.
The portfolio, the single largest acquisition MedProperties has made, is a mix of medical office buildings, in-patient rehab hospitals, a behavioral health hospital, and a multi-use campus. The biggest number of properties—seven—are in Texas, including the Lake Granbury Medical Center in Granbury and the Texas Rehabilitation Hospital of Arlington.
The latter is a single-tenant, 40-bed, 47,500-square-foot facility on West Arbrook Boulevard. The tenant is a joint venture between Texas Health Resources, Methodist, and Kindred Healthcare—a public, for-profit operator of rehab hospitals.
Darryl Freling, MedProperties’ managing principal, says that until this latest buy, MedProperties’ acquisition of “stabilized” properties had been limited to single asset or small portfolio purchases.
“The Harrison Street Portfolio provided MedProperties with the opportunity to acquire a large, geographically diverse critical mass of high-quality, relatively new healthcare properties with long-term, stable cash flows,” Freling says. “The properties have an average occupancy rate of 92 percent, and they’re leased primarily to a diverse mix of credit-rated tenants that are leading U.S. medical providers, representing virtually all major healthcare specialties.”
Representing the sellers of the Harrison Street Portfolio—Chicago-based Harrison Real Estate Capital LLC was the primary seller—were Chris Bodnar and Lee Asher, co-leaders of the CBRE Healthcare Capital Markets Group. Senior debt financing for the acquisition was secured through Erik Tellefson and Jon Buehner of Capital One. Mezzanine debt was secured through David Selznick and Andrew Smith at Kayne Anderson.