Wisconsin-based Physicians Realty Trust (NYSE: DOC) has closed on a $4.7 million deal to purchase the Carmel Medical Pavilion. The building is located on a St. Vincent Health campus. May 29, 2014
MILWAUKEE, Wis. – Physicians Realty Trust (NYSE:DOC) (“the Company”), a self-managed healthcare properties REIT, announced today the closing of the purchase and leaseback of a single-tenant medical office building located in Jackson, Mississippi, from MSMOC Properties, LLP. The 44,269 square foot medical office building is 100% occupied by Mississippi Sports Medicine and Orthopaedics (“MSMOC”). MSMOC is the largest independent orthopedic group in the Jackson area, and represents about 30% of the area’s orthopedic surgeons. The total purchase price was $16.7 million with a first year unlevered yield of 7.9%, with the physician owners taking approximately $1.9 million worth of operating partnership units in the Company’s operating partnership, Physician Realty L.P. (“OPUs”) in exchange for their interest in the building, in addition to net cash proceeds.
In addition, the Company closed on the purchase of the Carmel Medical Pavilion located on the St. Vincent Health Carmel Campus in the Indianapolis suburb of Carmel, Indiana. The Pavilion comprises 28,572 square feet and is fully leased to physicians, providers and St. Vincent Health-Carmel. The Carmel Medical Pavilion is located on ground that is leased long term from St. Vincent Carmel-Ascension Health. Ascension Health is the largest Catholic, mission-driven, not for profit health care system in the United States. The total purchase price was approximately $4.7 million with a first year unlevered yield of 7.25 percent, with the owners of the building taking approximately $1.3 million of the net proceeds in OPUs in exchange for their interest in the Carmel Medical Pavilion.
Robert Lodes, Chief Executive Officer of Mississippi Sports Medicine and Orthopaedic Center, “We are very pleased to be working with Physicians Realty Trust. Our physicians, who have owned our primary clinic facility, also designed and developed it to best serve the needs of our patients, providers and our Sports Medicine fellowship training program. Over the years, we have had to expand our facility as our practice and patient volumes have grown; and when John Thomas approached us about a potential relationship with Physicians Realty, we were careful to evaluate the opportunity with a specific focus on our ability to continue to control and optimize our facility to meet the growing needs of our patients and physicians. After our research and discussions with other physicians who work with Physicians Realty, we knew this would be a great partner for MSMOC. This is an opportunity that we have tremendous confidence in and several of our physicians elected to invest in DOC through the receipt of partnership units in Physicians Realty L.P. in lieu of cash consideration. We look forward to working with Physicians Realty for a very long time.”
“The Mississippi Sports Medicine and Orthopaedics Center is a fantastic addition to our portfolio and we look forward to working with this group of leading orthopedic surgeons for years to come. We are also very pleased with the opportunity to work with St. Vincent’s and acquire important medical real estate leased to a Top 100 Hospital in the United States located in a community selected in 2012 as the Best Place to Live in America by CNN Money Magazine. Both of these investments are consistent with our long-term strategic goals of building a portfolio of high quality medical office buildings leased to the top tier physicians and providers,” said John T. Thomas, CEO of Physicians Realty Trust.
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 intends to elect to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.
Source: Physicians Realty Trust