GLOBAL HEALTHCARE SERVICES

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Newmark Knight Frank (NKF) is pleased to announce the addition of national healthcare capital markets expert Ben Appel to the firm’s Global Healthcare Services (GHS) platform. Joining in a leadership role as an Executive Managing Director, Ben specializes in medical office building (MOB) sales, equity placement and financings. Ben is based in NKF’s Philadelphia office, joining a well-established and fully integrated medical office team.

Throughout his 12-year career, Ben has advised on medical office and healthcare real estate transactions in excess of $5 billion, including some of the nation’s most notable medical office transactions in recent years. Appel’s experie...

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Commentary by: Eric Murphy, Managing Director, Global Healthcare Services

On July 14, 2020, Banner Health acquired Wyoming Medical Center for $157 million. The medical center, located in Casper, WY, specializes in radiology, intensive care, pediatrics and neuro care.

Wyoming Medical Center

  • Headquarters: Casper, WY

  • Number of Beds: 217

  • Industry: Hospital/Inpatient Services

  • Services: Acute Care Services

  • Acquired By: Banner Health

  • Type: Acquisition

  • Deal Amount: $157 million

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Source: PitchBook Data, Inc., Newmark Knight Frank

M&A Deals represent Hospital/Inpatient Services and Clinics/Outpatient Services transactions

Commentary by: Jessica Moore, Financial Analyst, Global Healthcare Services

Forty-eight medical office building transactions closed in July, totaling over $472 million and 1.790 million square feet. California had the most medical office building transactions with 9 (18.8% of total), followed by Georgia and Florida with 4 each (8.3% of total). The average deal size was $11 million. The largest transaction was the acquisition of the 219,000-square-foot Mercy Wellness Center by Mercy in Oklahoma for $106.5 million.

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Source: Real Capital Analytics, as of August 26, 2020

Commentary by: Jay Miele, Senior Managing Director, Global Healthcare Services

Health system leaders are exploring short- and long-term strategies for restructuring their business models in the post-COVID-19 environment. Among them, in a recent survey of 50+ health systems, leadership identified securing and expanding their ambulatory footprints as a key initiative toward a sustainable recovery. As patients desire more convenient points of care and seek to limit hospital visits, health systems are looking to optimize their ambulatory care networks through acquisitions and joint ventures of ambulatory surgery centers. While the expansion of off-campus, outpatient care settings was occurring pr...

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Commentary by: Todd Perman, CCIM, Vice Chairman, Global Healthcare Services

A recent report estimated approximately 27% of health systems had used over 50% of their reserves by mid-June. While this was largely driven by the decrease in elective procedures amid the COVID-19 pandemic, one likely effect will be a surge in merger and acquisition activity. The second quarter 2020 M&A transaction volume fell to a 5-year low as health systems focused on managing financial and operational challenges caused by the pandemic. The increase in activity as we move into 2021 will be led by independent health systems seeking to secure partnerships as part of their post-COVID-19 recovery plans.

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Commentary by: John Nero, Managing Director, Global Healthcare Services

Despite a resurgence of COVID-19 cases in certain regions and new infection-control measures which can limit volume, elective surgery volumes have rebounded to pre-COVID-19 levels in many areas as of late July. Cancellation and rescheduling rates have drastically fallen and operating room minutes continue to rise as states lift bans on elective procedures and patient confidence in returning to the hospital or ambulatory setting grows. While short-term recovery is anticipated with August 2020 volume projected to be similar to August 2019 figures, hospitals will continue to offset the probable fluctuation in volumes through...

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Commentary by: Todd Perman, CCIM, Vice Chairman, Global Healthcare Services

Health systems are continuing to take urgent steps to mitigate the financial losses caused by the COVID-19 pandemic. A recent survey shows 85% of healthcare CFOs are planning significant reductions in expenses. Health system CFOs noted they have already begun cost reduction efforts, such as vendor renegotiations and reduced staffing, and plan to look to real estate cost savings opportunities including asset optimization and improved ambulatory access in the months ahead.

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Commentary by: Eric Murphy, Managing Director, Global Healthcare Services

Quest Diagnostics acquired its joint venture partner interests in Mid America Clinical Laboratories, the largest independent clinical lab in Indiana. Mid America Clinical Laboratories was formed as a joint venture between Quest Diagnostics, Ascension St Vincent and Community Health Network. Quest Diagnostics will take ownership of the Mid America Clinical Laboratories lab in Indianapolis and approximately 50 patient service centers across Indiana.

Mid America Clinical Laboratories

  • Headquarters: Indianapolis, IN

  • Industry: Clinics/Outpatient Services

  • Services: Laboratory Testing

  • Capital Provider: Quest Diagnostics

  • Transaction A...

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Commentary by: Jessica Moore, Financial Analyst, Global Healthcare Services

Fifty-four medical office building transactions closed in June, totaling over $922 million and 2.55 million square feet. California had the most medical office building transactions with seven sales (13.0% of total), followed by Texas with six sales (11.1% of total). The average deal size was $20 million. The largest individual property transaction was the 76,000-square-foot acquisition of Clinical Labs of Hawaii by Safehold Inc. for $45 million. Kayne Anderson’s $318 million acquisition of a 13-property portfolio from Welltower was the largest portfolio transaction, totaling 689,000 square feet across 11 states...

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Commentary by: Eric Murphy, Managing Director, Global Healthcare Services

Kelsey-Seybold Clinic is a premier, multispecialty practice group with over 20 locations in Houston. Last month, the practice received $14.2 million of development capital from an undisclosed investor to continue its expansion of services in the Houston metropolitan region.

Kelsey-Seybold Clinic

  • Headquarters: Houston, TX

  • Services: Inpatient Services

  • Capital Provider: Undisclosed Investors

  • Transaction Announced: May 14, 2020

  • Type: Development Capital

  • Deal Amount: $14.2M

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Source: PitchBook Data, Inc., Newmark Knight Frank
M&A Deals represent Hospital/Inpatient Services and Clinics/Outpatient Services transactions

All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Knight Frank has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark Knight Frank. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient's choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of Newmark Knight Frank, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains. This document is intended for informational purposes only and none of the content is intended to advise or otherwise recommend a specific strategy. It is not to be relied upon in any way to predict market movement, investment in securities, transactions, investment strategies or any other matter.

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