Under new management
The Medical Arts Pavilion at the campus of St. Francis Hospital and Medical Centers has been sold to a real estate investment trust that has been on a buying binge in 2010.
Healthcare Trust of America Inc., based in Scottsdale, Ariz., announced the purchase Nov. 15, putting the Pavilion among its national stable of properties.
The company describes itself on its website as “Self-managed, publicly registered, non-traded real estate investment trust.” Since Jan. 1, HTA has acquired about $412 million in medical office and healthcare-related assets, in 19 acquisitions representing about 1.9 million square feet. Since its founding in 2006, HTA has made 72 geographically diverse acquisitions valued at about $1.87 billion based on purchase price.
The Nov. 15 purchase of the Pavilion that HTA announced is a transaction that includes other properties from the same seller, Florida-based Rendina Cos.
Terms of the deal for the Pavilion were not disclosed but the entire transaction of five properties was valued at $86 million.
The pavilion in the City of Poughkeepsie was opened in 2007 after Rendina built it for $16.75 million. Under the deal with St. Francis, Rendina was responsible for financing the building. The hospital was to receive a portion of the rents paid by medical tenants.
The four-story, 73,000-square-foot property is a multi-tenant, multi-use medical office building, built to keep St. Francis from running out of space. The hospital leases a floor of the facility, which also provides office space for physicians with hospital privileges.
Rendina had initially offered tenants the opportunity for partial ownership of the project. The sale means those tenants will be bought out and get a cash settlement, said Jason Barlow, St. Francis vice president of offsite clinical and support services. He said the facility is about two-thirds leased.
“The new owners are going to be putting more money into enticing tenants into the building,” he said. Their approach will mean fewer upfront costs and make it easier to lease the remaining space, he said.
In the announcement, Mark Engstrom, executive vice president of acquisitions for Healthcare Trust, said: “This portfolio acquisition is significant because of its size, geographic diversification and long-term stability with strong tenants.”
The pavilion fits the HTA buying strategy, which it describes as acquiring “attractive medical office building that provide a focused asset mix for investors. In general, medical office buildings are a less risky sector to invest due to the health care sector being a more defensive sector.”