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Griffin-American Healthcare REIT IV Acquires Medical Office Building Near Phoenix
SURPRISE, Ariz. (May 2, 2018) – American Healthcare Investors and Griffin Capital Company, LLC, the co-sponsors of Griffin-American Healthcare REIT IV, Inc., announced today that the REIT has acquired Surprise Medical Office Building, located in the Phoenix suburb of Surprise, Arizona, for $11.7 million.
Built in 2012, the approximately 34,000-square-foot Surprise Medical Office Building is currently 89.5 percent leased to three tenants. Approximately 72 percent of the building is leased to two Banner Health-affiliated tenants, Banner Medical Group and the Center for Orthopedic Research and Education, Inc., whose leases have expiration dates in 2022 and 2028, respectively. All tenant leases include annual rent escalators of between 2.5 percent and three percent.
Based in Phoenix, Banner Health is a not-for-profit integrated health system serving the western United States. With more than 50,000 employees, Banner Health is the largest private employer in Arizona and among the largest employers in the country. Fitch Ratings Inc. has issued Banner Health an AA- credit rating. Healthcare services provided by the tenants of the building include neuroradiology, nuclear medicine, pediatrics, radiology, women’s health, physical therapy, family practice, on-site lab and an imaging center.
“Surprise Medical Office Building is strategically located near two major hospitals in a rapidly growing suburb of Phoenix where the average population growth exceeds the national average,” said Stefan Oh, executive vice president of acquisitions for American Healthcare Investors and Griffin-American Healthcare REIT IV. “The local population also includes a significant segment of senior citizens within a 15-mile radius of the property. We believe all of these factors make Surprise Medical Office Building an exceptional acquisition to the growing portfolio of Griffin-American Healthcare REIT IV.”
The Class A Surprise Medical Office Building was among the first developments of The City of Surprise, a 756-acre master planned urban area in the Northwest Valley of Phoenix. The building is within close proximity of the 404-bed Banner Del E. Webb Medical Center and the 425-bed Banner Boswell Medical Center.
Surprise Medical Office building was acquired from Banyan Surprise Plaza LLC, an unaffiliated third-party represented by Diana Shirek of JDS Real Estate Services, Inc. Griffin-American Healthcare REIT IV financed the acquisition using cash on hand and borrowings under its revolving line of credit with Bank of America, N.A. and KeyBank, National Association.
Griffin-American Healthcare REIT IV purchased its first property in June 2016 and, as of the date of acquisition of Surprise Medical Office Building, has since acquired a 2.6 million-square-foot portfolio of 44 medical office buildings, senior housing facilities and skilled nursing facilities located in 16 states for an aggregate contract purchase price of approximately $519.9 million. As of March 31, 2018, the company’s portfolio has a weighted average remaining lease term of 9.4 years1 and leased percentage of 95.6 percent.1 Additionally, the company is pursuing approximately $220.9 million in additional pending acquisitions2 which would result in a total portfolio of approximately 63 healthcare buildings located in 20 states comprised of approximately 3.5 million square feet of gross leasable area upon the successful completion of these potential acquisitions.
1 Excludes the company’s senior housing - RIDEA facilities. The company’s senior housing - RIDEA facilities were 76.3 percent leased for the three months ended March 31, 2018 and substantially all of the company’s leases with residents at such properties are for a term of one year or less. The operation of healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 is commonly referred to as a “RIDEA” structure.
2 Comprised of prospective real estate acquisitions for which the company has executed letters of intent and/or purchase and sale agreements as of April 15, 2018. These prospective acquisitions are subject to substantial closing conditions and the satisfaction of other requirements as detailed in the agreements. Accordingly, the closing of some or all of these pending transactions may not occur.
Posted in Press Release on May 02, 2018