Grubb & Ellis Healthcare REIT II has acquired five medical office buildings, including four in Arkansas and one in New Jersey, for $44 million.
Totaling approximately 179,000 sq. ft., each of the medical office buildings is located on the campus of, or fully leased to, a leading regional medical center.
To date, the public, non-traded real estatetrust based in Santa, Ana, Calif., has made 21 acquisitions that include 48 buildings valued at approximately $336 million.
“This five-building transaction is the first of a two-phase acquisition of a portfolio of eight medical office buildings,” says Danny Prosky, president and chief operating officer for Grubb & Ellis Healthcare REIT II.
“Once we have concluded the second phase, Grubb & Ellis Healthcare REIT II’s portfolio of clinical medical buildings will have expanded to include regional portfolios in Greater New York and central Arkansas, and we will have acquired our first property in the state of Washington,” adds Prosky.
Here are some additional details on each of the properties:
• Jersey City Medical Office Building, Jersey City, N.J. — Built in 2010, Jersey City Medical Office Building is a five-story, 68,000 sq. ft. Class-A facility on the campus of Jersey City Medical Center, a 332-bed community hospital with full inpatient and outpatient services.
The medical center lies just across the Hudson River from Manhattan and50% of the medical office building, which has no significant lease rollover until 2020.
• Medical Park Place I & II, Benton, Ark. — Medical Park Place I & II is a four-story, two-tower medical office complex totaling approximately 79,000 sq. ft. on the campus of Saline Memorial Hospital in Benton, an affluent suburb of Little Rock.
Built in 1992 and 1999, the medical office buildings are connected to each other and the hospital via sky bridges. Saline Memorial Hospital is a full-service, 167-bed acute care facility that has served the region for more than 50 years.
• Home Health Medical Complex, Benton, Ark. — Home Health Medical Complex, a two-story medical office building totaling approximately 10,000 sq. ft., also is located on the campus of Saline Memorial Hospital. The triple-net-lease agreement expires in 2024.
• Bryant Medical Office Building, Bryant, Ark. — Built in 1993 and fully renovated in 2006, Bryant Medical Office Building is a high-quality, single-story medical office building containing approximately 22,000 sq. ft. of rentable space at 23157 Interstate 30 in Bryant.
The building is located roughly 10 miles southwest of downtown Little Rock and nine miles northeast of Saline Memorial Hospital, which leases 86% of the facility via two leases that expire in 2024 and 2025.
The five medical office buildings were acquired from an unaffiliated third party represented by Jeffrey Cooper and Philip Mahler of Savills LLC.
Grubb & Ellis Healthcare REIT II financed the acquisition using cash proceeds from its offering, $31.1 million in borrowings under its line of credit with Bank of America, and $5 million in borrowings from Keybank.
As of May 20, Grubb & Ellis Healthcare REIT II has sold approximately 25,608,950 shares of its common stock, excluding the shares issued under it distribution reinvestment plan, for approximately $255.5 million through its initial public offering, which began at the end of the third quarter of 2009.
Grubb & Ellis Healthcare REIT II is seeking to raise up to approximately $3 billion in equity to acquire a diversified portfolio of real estate assets, focusing primarily on medical office buildings and other healthcare-related facilities.