GLOBAL HEALTHCARE SERVICES

NEWMARK

REIT Deals for Hospitals Are Picking Up

Lisa Phillips | http://healthcare.levinassociates.com


Most acquisitions in the Hospital sector are made by another hospital or health system. In 2016, 59% of U.S. hospital acquirers were not-for-profit organizations, down from 65% in 2015 but still the majority.


Lately, real estate investment trusts (REITs) have taken an interest in the hospital sector, where there seems to be no end to the supply of struggling standalone hospitals. Eight deals were announced by REITs in 2016, involving 19 hospitals, for a approximately $1.5 billion.


Many of the target hospitals or systems were owned by private equity firms which wanted out. That was the case in September 2016, when Cerberus Capital Management sold off the real estate assets of its portfolio company, the nine-hospital Steward Health Care System, LLC in Boston, Massachusetts for $1.25 billion. Medical Properties Trust (NYSE: MPW) did the sale/leaseback.


That deal followed the August 2016 sale by Healthcare Partners Investments, LLC of its two acute care hospitals and seven integrated medical facilities in Oklahoma City, Oklahoma for $116.5 million. Carter Validus Mission Critical REIT acquired the assets, capping its fourth transaction in the hospital sector in 2016.


Two REIT deals for hospitals have been announced in the first six weeks of 2017, an indication that this type of capital raise is becoming more acceptable to distressed hospitals.


Continue Reading Article


temp-post-image


All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark. 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, 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.

Download Our
Brochure

Sign Up for Our Newsletter

COVID-19 HeaTHCARE REAL ESTATE UPDATE