CHALLENGE

Integrated Medical Services (IMS) is a physician-led organization that was started in 2006 and has grown to approximately 145 providers with 65 locations throughout the Phoenix metropolitan area. From 2004 – 2008, IMS physicians and other investors built four, Class ‘A’ medical office buildings collectively comprising 406,894 RSF with strategic locations on/near leading hospital campuses in Maricopa County. The four separate real estate ownership entities leased the majority of the square footage to IMS and its affiliates at above market rental rates with short-term leases. Global Healthcare Services was hired to navigate the four separate ownership groups and structure the offering as a portfolio sale to maximize value.

ACTION

Global Healthcare Services underwrote the Portfolio and confidentially marketed the offering to prequalified investment groups that are active in the healthcare real estate investment community. GHS successfully ran a competitive marketing process and secured several qualified offers from national healthcare REITs and private investment groups. GHS met with each group of physician owners onsite and presented offers and the qualifications of each potential buyer. During the marketing and due diligence processes, GHS worked with the owners and successfully secured 10-year lease terms at NNN market rents from the IMS tenants.

RESULT

As a result of the competitive marketing process and lease term extensions, GHS successfully sold the portfolio to a healthcare REIT for $141M, setting a record as the highest price paid at $347 PSF for a multi-tenant medical office building portfolio located in metro Phoenix. Not only did NGKF exceed the owners’ expectations of the portfolio’s value by over $21M, the lease term extensions at market collectively decreased the IMS tenants’ annual rent obligations by over $1.5M.