REAL ESTATE- L&B Realty Advisors is now marketing its second medical office building investment fund, L&B Medical Partners II.
The person overseeing this fund for the company is director Jason Blake. He said, "We believe that institutional investors are becoming more comfortable with the medical office sector. We now have a track record to work with given the success we had we our first fund."
L&B is hoping to raise at least $100m (€77m) of equity for the second fund. The real estate manager figures that many of the investors in the fund will be pension funds. The minimum size contribution is $5m.
Investors in Medical Partners II are projected to achieve a mid teens leveraged IRR. This yield factors in a two- to three-year holding period.
The vast majority of the deals for the commingled fund will be investing equity in new development projects. There could be a few transactions that include buying existing properties that need a repositioning.
The developments will be created through establishing joint ventures with local or regional development partners. These companies will be investing in the project through a co-investment. These projects will not be taking a great deal of risk. There will be a high level of pre-leasing. This typically will be in the range of 50%.
L&B wants to invest in medical office properties that are part of a medical campus or is affiliated with a local hospital. The real estate manager figures that it will be looking for projects around the country. Some of the markets that it looks at include California, Texas, Florida, Indiana and Ohio.
A typical deal size for the investment fund will be in the range of $15m to $65m. These transactions will have 25% equity and 75% debt.