The attractiveness of healthcare real estate continues to attract new investors, creating strong competition from both institutional and private investors.
Last week, Vanbarton Healthcare Group joined Tramview Capital Management to be among the latest to announce a joint venture targeting healthcare investments in select markets across the country.
The new division is targeting approximately $100 million in short-term healthcare investments.
Mindy Berman, senior managing director of JLL Capital Markets, told GlobeSt.com that real estate investment managers and their financial partners have been drawn to alternative property categories such as healthcare to supplement their investment holdings.
“Medical practice buildings offer stable occupancy—national occupancy has not varied from 91% to 92% for 20 years—and sustainable income – consistent rental rates with modest annual growth,” Berman said.
“The pandemic period, once again, has witnessed the consistent performance qualities of outpatient medical buildings, while certain property classes have experienced higher vacancy, lower rental rates and rent collection issues.”
Christian Vaughan, managing partner of Stan Johnson Company, told GlobeSt.com that rising interest rates have made it harder for private investors to be as price aggressive, allowing institutional buyers to compete and win. more opportunities.
Capable and aggressive groups such as Vanbarton Healthcare Group and Tramview Capital Management will continue to win opportunities in the months to come and as such have their eyes on realizing a large amount of healthcare real estate, said Vaughan.
“In the coming months, we expect to see an influx of activity from institutional investors eager to deploy capital,” Vaughan said.
Population, size Engine Cypress West Partners
Chris Cumella, co-founding partner of Cypress West Partners, told GlobeSt.com that the best MSAs will always attract the most attention due to size and population growth.
“An asset’s physical relationship to a hospital campus in a top MSA checks everyone’s box,” Cumella said.
“However, as more and more services are forced out of the acute campus setting, more types of assets will gain favor and attention from investors.”
He said that Cypress West Partners has always focused more on the best systems and the best doctors than on pure MSA games.
“Healthcare real estate has benefited from a lack of speculative development and therefore more landlord-friendly measures in general,” Cumella said. “With high replacement and repositioning costs today, we expect this advantage to continue.”
The company’s first close consists of two medical office buildings totaling approximately 19,000 square feet in Port Charlotte and Venice, Florida, which are fully leased to one of the largest eye care service providers in the Southwest. from Florida.
Florida Markets Match Ideal Demographics
The Vanbarton acquisition included the flagship Community Eye Centers location adjacent to two major acute care hospitals with over 500 beds in Port Charlotte, Florida and a second location in Venice, Florida.
Both have above-average population growth and a disproportionately high population over 65 years of age.
Vanbarton Healthcare Group Director Steve Leathers said in prepared remarks: “These closings are indicative of Vanbarton Healthcare Group’s strategy of identifying overlooked pockets of value in an increasingly popular investment area in the global market. field of health. Both properties offer stable cash flow with minimal landlord obligations combined with attractive annual rent increases. »