Q3 2015 Investments Totaled $297 Million and Total Year-to-Date 2015
Net New Investments Exceeds $688 Million
MILWAUKEE--(BUSINESS WIRE)--
Physicians Realty Trust (NYSE:DOC) (the “Company”), a self-managed
healthcare properties REIT, announced today the closing of $297 million
of investments in medical office facilities during the third quarter of
2015. The Company has now completed more than $688 million of
investments in medical real estate during 2015. The closings include $88
million of closings previously announced on the second quarter earnings
call, $141 million related to the Integrated Medical Services (or IMS)
Portfolio in Arizona, as well as three previously unannounced
acquisitions.
IMS Portfolio. In August 2015, the Company completed four related
acquisitions of a 407,411 square foot portfolio of four medical office
facilities in Phoenix, Arizona affiliated with four major healthcare
providers for the total purchase price of $141 million. The portfolio is
96% occupied with three of the four buildings being located on the
campus of a hospital, including two of Tenet Healthcare’s Abrazo Phoenix
hospitals (NYSE:THC), and Honor Health’s John C. Lincoln Medical Center
(S&P: “A-”). Anchoring the portfolio is Integrated Medical Services, a
physician-led, multi-specialty group affiliated with Dignity Health
(S&P: “A”), who, along with their affiliates, represents 67% of the
portfolio’s leasable area. The current first year unlevered cash yield
is expected to be 6.6%.
Memorial Hermann Medical Complex. On September 1, 2015, the
Company completed the acquisition of two buildings, containing 107,737
square feet, affiliated with Memorial Hermann health system in Houston,
Texas. The facilities include clinical office space, an ambulatory
surgery center leased to a joint venture owned and managed by United
Surgical Partners, including ownership of the joint venture by Memorial
Hermann and physicians who provide services at the surgery center, and
other Memorial Hermann services. The facilities are located in Katy,
Texas and were acquired for a total purchase price of $40.4 million. The
current first year unlevered cash yield is expected to be 6.5%.
New Albany Medical Center. On September 9, 2015 the Company
completed the acquisition of a 60,000 square foot medical office
building located on the campus of Trinity Health’s Mount Carmel - New
Albany Surgical Hospital. This facility is located in an affluent suburb
of Columbus, Ohio, is 92% occupied and was acquired for a total purchase
price of $11.2 million, including 16,866 partnership interests in the
Company's operating partnership ("OP Units"), worth approximately
$240,000 at the time, distributed to one owner of the facility who
contributed his ownership to the Company’s operating partnership. The
current first year unlevered cash yield is expected to be 7.5%.
Fountain Hills Medical Campus. On September 30, 2015, the Company
closed on the purchase of a 49,054 square foot medical campus in
Fountain Hills, Arizona, just northeast of Scottsdale, for a total
purchase price of $13.3 million. The campus is 93% occupied by a number
of medical providers, and the current first year unlevered cash yield is
expected to be 7.0%.
John T. Thomas, President and Chief Executive Officer stated, “We are
very proud of all of the acquisitions we completed this quarter. This
was not only the largest volume of quarterly acquisitions in the history
of our company, but we added some of the highest quality facilities and
providers in the country to our organization, including major health
system affiliated facilities in three Top 20 metropolitan areas,
Columbus, Ohio, Phoenix, Arizona and Houston, Texas. The IMS facilities
in Phoenix were developed by physicians in that group and strategically
placed on hospital campuses and in a specific outpatient location. These
facilities serve to enhance access to care for their patients and
integrate IMS's health system relationships. We expect to have the
opportunity to grow our investments working with these providers.”
In addition to the properties the Company has acquired this quarter, it
has entered into definitive agreements through subsidiaries of its
operating partnership to make six acquisitions of 17 healthcare
properties located in six states for an aggregate of approximately $91.5
million in pending acquisitions, which includes one mezzanine loan in
the amount of $4.5 million.
- Catalyst Portfolio, Alabama & Florida: This portfolio
consists of 12 medical office facilities, totaling 94,276 square feet,
for a purchase price totaling $23.8 million at a capitalization rate
of 7.2%. The portfolio is 88% occupied collectively; and the primary
anchor tenant in many of the facilities is Pensacola, Florida, based
Baptist Health Care (S&P: “AA”) and includes other high quality
physician providers. In addition to the twelve medical office
buildings in the transaction, the Company will receive the first-right
of refusal to acquire the seller’s future development pipeline upon
completion, which currently totals nearly 240,000 square feet of
medical office facilities, anchored by healthcare systems.
- Cambridge Professional Center, Waldorf, Maryland: This medical
office facility is a 41,493 square foot, medical office facility
located in an affluent and fast-growing suburb of Washington, DC. The
two-story facility is 100% leased to five tenants with long-term
leases and anchored by an endoscopy ambulatory surgery center. The
purchase price for the property will be approximately $11.6 million
based on a 6.9% capitalization rate, payable in cash.
- Community Health Network Building, Indianapolis, Indiana: This
42,187 square foot medical office facility is 100% leased by Community
Hospital of Indiana (S&P: “A”) for family medicine, sports medicine,
and physical therapy. Upon closing, Community Hospital of Indiana will
sign a new 12-year lease. The purchase price for the property will be
approximately $11.6 million based on a 6.5% capitalization rate,
payable in cash.
- Mercy Medical Center, Fenton, Missouri: This medical office
facility is 100% leased to Mercy Health System (S&P: “AA-”), a member
of the Sisters of Mercy Health System, St. Louis, Inc., one of the
largest Catholic healthcare systems in the United States. The
outpatient medical office building is strategically located in the
community with urgent care, family medicine, and women’s health
services. The 30,000 square foot facility has a purchase price of $9.7
million based on a capitalization rate of 6.5%, payable in cash or OP
Units at the seller’s option.
- Great Falls Replacement Surgical Hospital, Great Falls, Montana:
The Company agreed to provide a mezzanine loan in the amount of
approximately $4.5 million to construct a replacement surgical
facility, which will be approximately 63,886 square feet and adjacent
to the physician owners existing primary clinical office facility.
This new facility is replacing an existing successful surgical
facility from across town to a location more efficient to the
physician owners and patients they serve. Currently, no money has been
borrowed under the mezzanine loan. Upon the completion of the
construction of the building, which is expected to occur near the end
of 2015, the Company has an option to purchase the building and it
expects to pay approximately $26.3 million based on a 8.8%
capitalization rate. The building will be 100% occupied upon
completion.
- St. Vincent - Naab, Indianapolis, Indiana: This 40,936 square
foot medical office building is located on the campus of Ascension
Health (S&P: “AA+”) flagship St. Vincent Hospital, in Indianapolis,
Indiana. The multi-tenant facility is anchored by St. Vincent with
services, including woman’s health, oncology, and diagnostic imaging.
The purchase price is approximately $8.5 million based on a
capitalization rate of 6.8%, payable in cash or OP Units at the
seller’s option. The building is 100% occupied.
Each pending acquisition described in this press release is subject to
customary closing conditions and there can be no assurance the Company
will complete any of these transactions or acquire any of these
buildings.
About Physicians Realty Trust
Physicians Realty Trust is a self-managed healthcare real estate company
organized to acquire, selectively develop, own and manage healthcare
properties that are leased to physicians, hospitals and healthcare
delivery systems. The Company invests in real estate that is integral to
providing high quality healthcare. The Company is a Maryland real estate
investment trust and has elected to be taxed as a REIT for U.S. federal
income tax purposes. The Company conducts its business through an UPREIT
structure in which its properties are owned by Physicians Realty L.P., a
Delaware limited partnership, directly or through limited partnerships,
limited liability companies or other subsidiaries.
Investors are encouraged to visit the Investor Relations portion of the
Company’s website (www.docreit.com)
for additional information, including annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended, press
releases, supplemental information packages and investor presentations
Forward-Looking Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements may
be identified by the use of words such as “anticipate”, “believe”,
“expect”, “estimate”, “plan”, “outlook”, and “project” and other similar
expressions that predict or indicate future events or trends or that are
not statements of historical matters. These forward looking statements
include any statements regarding the Company’s strategic and operational
plans. Forward looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate
indications of the times at, or by, which such performance or results
will be achieved. Forward looking statements are based on information
available at the time those statements are made and/or management’s good
faith belief as of that time with respect to future events, and are
subject to risks and uncertainties that could cause actual performance
or results to differ materially from those expressed in or suggested by
the forward looking statements. These forward looking statements include
any statements regarding the Company’s strategic and operational plans.
These forward-looking statements are subject to various risks and
uncertainties, not all of which are known to the Company and many of
which are beyond the Company’s control, which could cause actual results
to differ materially from such statements. These risks and uncertainties
are described in greater detail in the Company’s filings with the
Securities and Exchange Commission (the "Commission"), including,
without limitation, the Company’s annual and periodic reports and other
documents filed with the Commission. Unless legally required, the
Company disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise. Completion of the offering on the terms described, and the
application of net proceeds, are subject to numerous conditions, many of
which are beyond the control of the Company, including, without
limitation, general economic conditions, market conditions and other
factors, including those factors discussed in the preliminary prospectus
supplement and accompanying prospectus and in the Company’s annual and
periodic reports and other documents filed with the Commission, copies
of which are available on the Commission’s website,www.sec.gov.
The Company undertakes no obligation to update these statements after
the date of this release.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151013006805/en/
Physicians Realty Trust
John T. Thomas, 214-549-6611
President
and CEO
or
Jeff N. Theiler, 414-367-5610
EVP and CFO
Source: Physicians Realty Trust