KKR Acquires Portfolio of Medical Office Buildings, Ambulatory Surgery Centers.
MANews-(C)2009-2021
US-based investment firm KKR's (NYSE: KKR) KKR Real Estate Select Trust Inc. has acquired a portfolio of core medical office buildings and ambulatory surgery centers located in seven Sun Belt states, the firm said.
The portfolio was assembled by Montecito Medical, a player in the medical office space, and FCA Partners, a real estate investment management company.
The transaction will recapitalize the portfolio with Montecito Medical retaining its interest in and operational responsibility for the properties.
The purchase marks KREST's first acquisition of core healthcare real estate assets, further diversifying the fund's portfolio following its recent first-time multifamily property investment, as well as its first international property acquisition.
The investment aligns with KREST's focus on thematically-driven, stabilized, income-generating commercial real estate, which is one of the fund's three primary investment strategies.
The portfolio consists of 15 outpatient medical office buildings and ambulatory surgery centers totaling approximately 400,000 square feet.
The properties are located across the southern United States in growth submarkets within Arkansas, Florida, Georgia, North Carolina, Tennessee, Texas and South Carolina.
The portfolio is over 99% leased to a mix of leading investment grade health systems and specialist medical groups in practice areas including orthopedics and ophthalmology, with a weighted average lease term greater than 10 years.
Newmark's Healthcare Capital Markets Group advised Montecito Medical and KKR on the transaction and provided advice to KKR on debt financing. BMO Harris Bank's Healthcare Real Estate group provided financing for the transaction.
Simpson Thacher and Bartlett LLP acted as legal counsel to KKR, and Allen Matkins Leck Gamble Mallory and Natsis LLP acted as legal counsel to Montecito Medical and FCA.
KKR Real Estate Select Trust Inc. is a continuously offered, registered closed-end fund that thematically invests in high quality, stabilized, income-oriented commercial real estate equity and debt.
The fund is open to all investors with daily subscriptions and its primary investment objective is to provide attractive current income, with a secondary objective of long-term capital appreciation.
KREST is managed by KKR Registered...
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