Remedy-Kayne JV Strike Near Record MOB Senior Financing Acquisition in $7.2B Deal
Remedy Medical Properties and Kayne Anderson Real Estate, through a joint venture, have acquired 221 medical office building assets for $7.2 billion. Also, the two are getting a $3.57 billion loan from financial institutions led by Capital One. According to the bank, this represents one of the largest senior bank financings ever provided in the MOB space.
The portfolio of properties that was sold by Welltower Inc. is located in the District of Columbia and 24 states. No other specifics about the regions were revealed.
This is far from the first time that Kayne and Remedy have teamed up on a healthcare buy. In fact, Capital One said that the partnership makes the JV the largest operator of MOB buildings in the country. Together, they manage roughly 1,100 properties in 44 states, spanning more than 52.4 million square feet. Another recent deal occurred in May of 2024, where the two announced the purchase of 37 healthcare assets in 13 states for $252 million.
“We are very happy to be lead left agent of the syndication group with Capital One committing over $1.2 billion of this $3.57 billion financing for a large MOB portfolio that will redefine the MOB market, particularly with our long-time strategic customers Kayne Anderson and Remedy," Erik Tellefson, senior managing director and head of healthcare real estate lending of Capital One.
Tellefson added that Capital One's transactional history with Kayne and Remedy goes back almost 15 years. Capital One also served as the lone bookrunnner and lead left administrative agent on the record financing deal. Some other banks involved with the loan included JP. Morgan, Truist Securities, Ally Bank and BMO Bank N.A.
In the CRE lending sector, medical office buildings seem quite healthy, with the delinquency rate for commercial mortgage-backed securities loans collateralized for those properties sitting at 6.15 percent, according to a report from Trepp. That's at least compared with traditional office, whose loans are operating at a higher 11.31 percent rate. Medical has the advantage in the workforce, as employment among physicians, dentists and other health practitioners increased in August, the Bureau of Labor Statistics reported. Meanwhile, jobs in conventional office-based industries—such as professional and financial services—declined.
Source: GlobeSt/ALM