Grubb & Ellis Healthcare REIT II Inc. has acquired the Dixie-Lobo Medical Office Building Portfolio of eight properties consisting of 10 medical office buildings located in Arkansas, Louisiana, New Mexico and Texas.
The Dixie-Lobo Medical Office Building Portfolio was acquired from eight individual selling entities that are all directly or indirectly controlled by White Plains, N.Y.-based Seavest Inc., or an affiliate of Seavest. The transaction was a private, off-market deal.
Grubb & Ellis Healthcare REIT II, a public, non-traded real estate investment trust based in Santa Ana, Calif., financed the acquisition with a $23.24 million loan assumption and cash proceeds received from its offering.
Totaling more than 156,000 sq. ft., the Dixie-Lobo Medical Office Building Portfolio includes facilities that range in size from 10,000 to 33,000 sq. ft., with an average size of 16,000 sq. ft.
Each of the 10 medical office buildings is located on the campus of local hospitals. Six of the properties are affiliated with Community Health Systems, one of the nation’s largest operators of general acute care hospitals in non-urban and mid-size markets.
The remaining four buildings are located on the campuses of, and leased to, hospitals affiliated with Christus Spohn Health System and Signature Hospital Corp. The facilities are master leased to the hospitals with expirations staggered between November 2015 and August 2017. Each of the hospital tenants has four renewal options with each option spanning five years.
“The Dixie-Lobo Medical Office Building Portfolio epitomizes what Grubb & Ellis Healthcare REIT II values in medical office acquisitions,” said Danny Prosky, president and chief operating officer.
“They are all located on thriving hospital campuses with long-term stabilized tenancy, are immediately accretive to our bottom line, and supportive of our investor distribution,” adds Prosky. “We are very pleased to add these properties to our high-quality portfolio of clinical medical buildings."
The 10 buildings that comprise the Dixie-Lobo Medical Office Building Portfolio include:
• 302 Bill Clinton Drive, Hope, Ark., a single-story, 9,000 sq. ft. property on the campus of Medical Park Hospital.
• 1920 W. Sale Road, Lake Charles, La., a single-story, 15,000 sq. ft. building on the campus of Women & Children’s Hospital.
• 2420 W. Pierce St., Carlsbad, N.M., a two-story, 24,000 sq. ft. building on the campus of Carlsbad Medical Center.
• 5419 N. Lovington Highway, Hobbs, N.M., a single-story, 15,000 sq. ft. building on the campus of Lea Regional Medical Center.
• 2510 and 2420 E. Main St., Alice, Texas, two single-story buildings totaling 25,000 sq. ft. on the campus of Christus Spohn Hospital Alice.
• 302 Medical Park Drive, Lufkin, Texas, a single-story, 15,000 sq. ft. building on the campus of Woodland Heights Medical Center.
• 110 Medical Drive, Victoria, Texas, a single-story, 33,000 sq. ft. building on the campus of De Tar Hospital North.
• 2112 Regional Medical Drive, Wharton, Texas, two single-story buildings totaling 20,000 sq. ft. on the campus of Gulf Coast Medical Center.
Grubb & Ellis Healthcare REIT II is seeking to raise up to approximately $3 billion in equity and to acquire a diversified portfolio of real estate assets, focusing primarily on medical office buildings and other healthcare-related facilities.
To date, the real estate investment trust has made 20 geographically diverse acquisitions comprised of 43 buildings valued at approximately $292 million.