The Canada Pension Plan Investment Board (CPPIB) and Health Care REIT have formed a 45%/55% joint venture to hold a portfolio of medical offices in Southern California.
The joint venture will initially own a 50.5% interest in the portfolio, fully valued at $449m (€409m).
Peter Ballon, managing director and head of real estate investment for the Americas at CPPIB, said: “This acquisition marks our entry into the healthcare real estate sector, a growing and compelling sub-sector within the real estate market.
“With an ageing population and increasing demand for healthcare, we view the US healthcare real estate sector as an attractive long-term investment.”
The seller, which contributed the portfolio in exchange for a mix of operating partnership units and cash, will keep a 49.5% ownership stake.
It is expected that CPPIB and Health Care REIT’s stake will increase to 100% upon the seller’s conversion of operating partnership units into HCN stock or cash.
The portfolio of eight medical office buildings totals 437,875 sq ft, with the majority of assets within the Golden Triangle district of Beverly Hills, California.
The remainder of the portfolio’s assets are in the San Diego and Los Angeles markets.