American Realty Capital Healthcare Trust, a public REIT of American Realty Capital, has purchased a three building portfolio of medical office properties in Nevada and Arizona for $60.9 million according to a GlobeSt.com article. The portfolio was purchased from The Cirrus Group LLC for roughly $788 per square foot.
The properties include: one multi-specialty medical campus located in Carson City, Nevada, at a purchase price of approximately $29.0 million; one medical office building located in Las Vegas, Nevada, at a purchase price of approximately $22.9 million; and one inpatient rehabilitation facility located in Phoenix, Arizona, for approximately $9.0 million. The acquisitions total approximately 241,000 square feet, and are approximately 92% leased to 19 tenants. Approximately 11.5% of the tenants, based upon property revenues, have leases expiring prior to December 31, 2016. Nearly 32% of the tenants have lease terms beyond ten years from the closing date.
"It's hard to get zero leases expiring in a ten year period, so for us if only 10 percent of the leases expire over a ten year period we're quite happy with that," said Todd Jensen, chief investment officer at ARC Healthcare Trust."In this case, it's about 10% that expire over the next five years but more than 30% have lease terms beyond 10 years. Typically our lease term is going to be a little bit longer than what you see in this piece of the portfolio but this is still very acceptable to us."
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