Despite COVID-19 taking a hit on REIT stocks and earnings, especially in the senior care industry, some buyers managed to close deals in May, primarily for medical office buildings. This might come as a surprise since physician practices are getting hit especially hard by COVID-19, so these deals may have been in the works before the pandemic crashed into the economy, or real estate values are running cheap.
Just this week, Anchor Health Properties, a full-service real estate development, management, and investment company focused on healthcare property, announced its purchase of the Walther Professional Center, an 18,471-square-foot medical office building located close to Northside Hospital-Gwinnett outside of Atlanta. The property is currently fully leased to two tenants, Northeast Atlanta Ear, Nose & Throat and Eastside Heart and Vascular. Transwestern represented the seller, ENTOB LLC, in the sale.
On May 18, IRA Capital purchased a medical office building in Santa Ana, California for $38.4 million from St. Joseph Hospital of Orange. The 56,809-square-foot property is a freestanding three-story building with St. Joseph as the anchor tenant with a 10-year triple-net lease. The hospital currently operates primary care services, a pharmacy, and a dialysis center at the site. The building underwent an $8.5 million specialized medical improvement program and features excess land that can accommodate an additional medical office building. CBRE represented the seller.
On the same day, East Ohio Hospital LLC, a REIT and operator, purchased East Ohio Regional Hospital, a 140-bed hospital closed on September 27, 2019, by Alecto Healthcare Services, a for-profit hospital company based in Irvine, California.
On May 11, UK-based Primary Health Properties (LSE: PHP) paid $66.3 million for a portfolio of medical office buildings located across England and Wales. The acquired properties are leased to general practitioners, other NHS healthcare operators and pharmacies, with approximately 91% of the rental income backed by the government. This acquisition increases PHP’s portfolio in the UK and Ireland to a total of 510 assets. Primary Health Properties has conditionally contracted to acquire two more medical office buildings as well.