Harrison Sells $283M Portfolio

Harrison Street Real Estate Capital, the Chicago-based private investment firm, announced this week that it had sold a portfolio of 12 healthcare properties across the United States for $283 million. Terms of the deals and named buyers were not disclosed. The portfolio is comprised primarily of newly constructed Class A buildings in Florida, Texas, Nevada, Oklahoma, South Carolina and Indiana, and were, on average, 99.6% leased at the time of sale to health systems, physician groups and hospitals. Harrison Street assembled the portfolio through single-asset acquisitions and development with four operating partners using capital from Harrison Street Real Estate Partners III, the third private vehicle in its opportunity fund series. That fund closed on $595 million in June 2011.

"The landscape of healthcare delivery is changing," said Brian Mutchler, co-head of Harrison Street’s asset management group, in a GlobeSt. article. "The traditional hospital is not necessarily the setting for acute care as evidenced by the advent of properties designed for and dedicated to the treatment of specialized conditions. It is anticipated that an integrative approach: partnerships with strong health systems coupled with specialized services easily accessible to the local community will continue since it presents a convenient and cost effective approach to healthcare delivery."

For more news and information visit Blumberg Capital Partners.

WRIT Disposes of $307M in Medical Properties

Washington Real Estate Investment Trust (WRIT), a metro-DC-based equity real estate investment trust founded in 1960, announced that it had completed two separate sale transactions to complete the first phase of the disposition of the company's medical office portfolio. During an earnings call last month, company officials said the medical building selloff was a move to raise capital rather than borrowing to expand. WRIT reported two deals totaling $307.2 million covering about 877,000 square feet of medical office space, plus another 216,000 square feet of office space, much of it filled with medical tenants.

"As planned, the structure of this large transaction has provided WRIT the flexibility to redeploy the sales proceeds into assets that are aligned with our current strategy. We look forward to executing the two remaining medical office sales transactions in the next few months," said Paul T. McDermott, President and Chief Executive Officer of WRIT.

The first sale transaction included 2440 M Street, Alexandria Professional Center, Woodholme Medical Office Building, 9850 Key West Avenue, 15001 Shady Grove Road, 15005 Shady Grove Road, 6565 Arlington Boulevard, 19500 at Riverside Office Park, 9707 Medical Center Drive, Woodholme Center, CentreMed I & II, Ashburn Farm I, II and III, 8301 Arlington Boulevard and Sterling Medical Office Building. The second transaction included 4661 Kenmore Avenue, a land parcel that is being utilized as off-site/overflow parking for one of the medical office buildings, Alexandria Professional Center, located in Alexandria, Virginia. The sole buyer in these transactions was Harrison Street Real Estate Capital. WRIT’s remaining medical office properties are also under two additional contracts with Harrison Street Real Estate Capital and are projected to close as follows: Woodburn I & II on or about January 31, 2014 for approximately $79 million, and Prosperity I, II and III on or about January 31, 2014 for approximately $114.6 million.

"The sale of their MOBs, like the sale of their industrial portfolio two years ago, was excellent from a strategic, pricing and timing perspective," John Guinee III, managing director with brokerage and investment banking firm Stifel Nicolaus & Co. Inc., told Commercial Property Executive. But having half-a-billion-dollar to play with in pursuit of a new investment strategy may not be as simple as it seems. "The WRIT challenge is what to do with the proceeds, as the DC-area real estate investment sales market remains hot with a disconnect between pricing and fundamentals–high versus uninspiring," Guinee added.

For more news and information visit Blumberg Capital Partners.