Q3 2015 Investments Totaled $297 Million and
Total Year-to-Date 2015 Net New Investments Exceeds $688
Million
Physicians Realty Trust (NYSE:DOC) (the “Company”), a
self-managed healthcare properties REIT, announced today the
closing of $297 million of investments in medical office facilities
during the third quarter of 2015. The Company has now completed
more than $688 million of investments in medical real estate during
2015. The closings include $88 million of closings previously
announced on the second quarter earnings call, $141 million related
to the Integrated Medical Services (or IMS) Portfolio in Arizona,
as well as three previously unannounced acquisitions.
IMS Portfolio. In August 2015, the Company completed four
related acquisitions of a 407,411 square foot portfolio of four
medical office facilities in Phoenix, Arizona affiliated with four
major healthcare providers for the total purchase price of $141
million. The portfolio is 96% occupied with three of the four
buildings being located on the campus of a hospital, including two
of Tenet Healthcare’s Abrazo Phoenix hospitals (NYSE:THC), and
Honor Health’s John C. Lincoln Medical Center (S&P: “A-”).
Anchoring the portfolio is Integrated Medical Services, a
physician-led, multi-specialty group affiliated with Dignity Health
(S&P: “A”), who, along with their affiliates, represents 67% of
the portfolio’s leasable area. The current first year unlevered
cash yield is expected to be 6.6%.
Memorial Hermann Medical Complex. On September 1, 2015, the
Company completed the acquisition of two buildings, containing
107,737 square feet, affiliated with Memorial Hermann health system
in Houston, Texas. The facilities include clinical office space, an
ambulatory surgery center leased to a joint venture owned and
managed by United Surgical Partners, including ownership of the
joint venture by Memorial Hermann and physicians who provide
services at the surgery center, and other Memorial Hermann
services. The facilities are located in Katy, Texas and were
acquired for a total purchase price of $40.4 million. The current
first year unlevered cash yield is expected to be 6.5%.
New Albany Medical Center. On September 9, 2015 the Company
completed the acquisition of a 60,000 square foot medical office
building located on the campus of Trinity Health’s Mount Carmel -
New Albany Surgical Hospital. This facility is located in an
affluent suburb of Columbus, Ohio, is 92% occupied and was acquired
for a total purchase price of $11.2 million, including 16,866
partnership interests in the Company's operating partnership ("OP
Units"), worth approximately $240,000 at the time, distributed to
one owner of the facility who contributed his ownership to the
Company’s operating partnership. The current first year unlevered
cash yield is expected to be 7.5%.
Fountain Hills Medical Campus. On September 30, 2015, the
Company closed on the purchase of a 49,054 square foot medical
campus in Fountain Hills, Arizona, just northeast of Scottsdale,
for a total purchase price of $13.3 million. The campus is 93%
occupied by a number of medical providers, and the current first
year unlevered cash yield is expected to be 7.0%.
John T. Thomas, President and Chief Executive Officer stated,
“We are very proud of all of the acquisitions we completed this
quarter. This was not only the largest volume of quarterly
acquisitions in the history of our company, but we added some of
the highest quality facilities and providers in the country to our
organization, including major health system affiliated facilities
in three Top 20 metropolitan areas, Columbus, Ohio, Phoenix,
Arizona and Houston, Texas. The IMS facilities in Phoenix were
developed by physicians in that group and strategically placed on
hospital campuses and in a specific outpatient location. These
facilities serve to enhance access to care for their patients and
integrate IMS's health system relationships. We expect to have the
opportunity to grow our investments working with these
providers.”
In addition to the properties the Company has acquired this
quarter, it has entered into definitive agreements through
subsidiaries of its operating partnership to make six acquisitions
of 17 healthcare properties located in six states for an aggregate
of approximately $91.5 million in pending acquisitions, which
includes one mezzanine loan in the amount of $4.5 million.
- Catalyst Portfolio, Alabama &
Florida: This portfolio consists of 12 medical office facilities,
totaling 94,276 square feet, for a purchase price totaling $23.8
million at a capitalization rate of 7.2%. The portfolio is 88%
occupied collectively; and the primary anchor tenant in many of the
facilities is Pensacola, Florida, based Baptist Health Care
(S&P: “AA”) and includes other high quality physician
providers. In addition to the twelve medical office buildings in
the transaction, the Company will receive the first-right of
refusal to acquire the seller’s future development pipeline upon
completion, which currently totals nearly 240,000 square feet of
medical office facilities, anchored by healthcare systems.
- Cambridge Professional Center, Waldorf,
Maryland: This medical office facility is a 41,493 square foot,
medical office facility located in an affluent and fast-growing
suburb of Washington, DC. The two-story facility is 100% leased to
five tenants with long-term leases and anchored by an endoscopy
ambulatory surgery center. The purchase price for the property will
be approximately $11.6 million based on a 6.9% capitalization rate,
payable in cash.
- Community Health Network Building,
Indianapolis, Indiana: This 42,187 square foot medical office
facility is 100% leased by Community Hospital of Indiana (S&P:
“A”) for family medicine, sports medicine, and physical therapy.
Upon closing, Community Hospital of Indiana will sign a new 12-year
lease. The purchase price for the property will be approximately
$11.6 million based on a 6.5% capitalization rate, payable in
cash.
- Mercy Medical Center, Fenton, Missouri:
This medical office facility is 100% leased to Mercy Health System
(S&P: “AA-”), a member of the Sisters of Mercy Health System,
St. Louis, Inc., one of the largest Catholic healthcare systems in
the United States. The outpatient medical office building is
strategically located in the community with urgent care, family
medicine, and women’s health services. The 30,000 square foot
facility has a purchase price of $9.7 million based on a
capitalization rate of 6.5%, payable in cash or OP Units at the
seller’s option.
- Great Falls Replacement Surgical
Hospital, Great Falls, Montana: The Company agreed to provide a
mezzanine loan in the amount of approximately $4.5 million to
construct a replacement surgical facility, which will be
approximately 63,886 square feet and adjacent to the physician
owners existing primary clinical office facility. This new facility
is replacing an existing successful surgical facility from across
town to a location more efficient to the physician owners and
patients they serve. Currently, no money has been borrowed under
the mezzanine loan. Upon the completion of the construction of the
building, which is expected to occur near the end of 2015, the
Company has an option to purchase the building and it expects to
pay approximately $26.3 million based on a 8.8% capitalization
rate. The building will be 100% occupied upon completion.
- St. Vincent - Naab, Indianapolis,
Indiana: This 40,936 square foot medical office building is located
on the campus of Ascension Health (S&P: “AA+”) flagship St.
Vincent Hospital, in Indianapolis, Indiana. The multi-tenant
facility is anchored by St. Vincent with services, including
woman’s health, oncology, and diagnostic imaging. The purchase
price is approximately $8.5 million based on a capitalization rate
of 6.8%, payable in cash or OP Units at the seller’s option. The
building is 100% occupied.
Each pending acquisition described in this press release is
subject to customary closing conditions and there can be no
assurance the Company will complete any of these transactions or
acquire any of these buildings.
About Physicians Realty Trust
Physicians Realty Trust is a self-managed healthcare real estate
company organized to acquire, selectively develop, own and manage
healthcare properties that are leased to physicians, hospitals and
healthcare delivery systems. The Company invests in real estate
that is integral to providing high quality healthcare. The Company
is a Maryland real estate investment trust and has elected to be
taxed as a REIT for U.S. federal income tax purposes. The Company
conducts its business through an UPREIT structure in which its
properties are owned by Physicians Realty L.P., a Delaware limited
partnership, directly or through limited partnerships, limited
liability companies or other subsidiaries.
Investors are encouraged to visit the Investor Relations portion
of the Company’s website (www.docreit.com) for additional information,
including annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, press releases,
supplemental information packages and investor presentations
Forward-Looking Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
“anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”,
and “project” and other similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. These forward looking statements include any
statements regarding the Company’s strategic and operational plans.
Forward looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate
indications of the times at, or by, which such performance or
results will be achieved. Forward looking statements are based on
information available at the time those statements are made and/or
management’s good faith belief as of that time with respect to
future events, and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from
those expressed in or suggested by the forward looking statements.
These forward looking statements include any statements regarding
the Company’s strategic and operational plans. These
forward-looking statements are subject to various risks and
uncertainties, not all of which are known to the Company and many
of which are beyond the Company’s control, which could cause actual
results to differ materially from such statements. These risks and
uncertainties are described in greater detail in the Company’s
filings with the Securities and Exchange Commission (the
"Commission"), including, without limitation, the Company’s annual
and periodic reports and other documents filed with the Commission.
Unless legally required, the Company disclaims any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise. Completion of the offering
on the terms described, and the application of net proceeds, are
subject to numerous conditions, many of which are beyond the
control of the Company, including, without limitation, general
economic conditions, market conditions and other factors, including
those factors discussed in the preliminary prospectus supplement
and accompanying prospectus and in the Company’s annual and
periodic reports and other documents filed with the Commission,
copies of which are available on the Commission’s
website,www.sec.gov. The Company
undertakes no obligation to update these statements after the date
of this release.
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version on businesswire.com: http://www.businesswire.com/news/home/20151013006805/en/
Physicians Realty TrustJohn T. Thomas, 214-549-6611President and
CEOorJeff N. Theiler, 414-367-5610EVP and CFO
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