Nuveen Real Estate has acquired 27 medical offices properties in the US for $463m (€391m), with $234m of debt financing from Allianz Real Estate.
The portfolio was sold by IRA Capital and purchased for the open-ended Nuveen US Cities Office Fund and an unnamed third-party institutional investor.
Allianz Real Estate has provided seven-year debt, including a $164m fixed-rate tranche and a $70.2m floating-rate tranche, on behalf of several Allianz group companies.
Encompassing more than 747,000sqft of rentable space, the 27 class-A and B properties are in 13 states: Arizona, California, Florida, Illinois, Michigan, North Carolina, New Jersey, New York, Pennsylvania, Texas and Wisconsin.
The portfolio rent roll has a weighted-average unexpired lease term of 12 years, and the portfolio includes traditional medical offices, urgent care centres, outpatient surgeries, and specialist treatment centres and hospitals.
Allianz said the majority of the properties are located in CON states, in which local governments require extensive approval processes to prove the need for the development of new healthcare facilities in each location – providing high barriers to entry and regulatory restrictions around new supply.
The portfolio is 99% occupied by 38 tenants, of which 92% are investment-grade credit healthcare systems.
Mike Cale, co-head of US debt at Allianz Real Estate, said: “This is a complex and innovative transaction that underlines our willingness to take a flexible approach to meeting the requirements of one of our long-standing global partners.
“COVID-19 has highlighted the need for improved efficiency and ease of access to healthcare, increasing demand for outpatient centers and higher-severity care space within hospitals.
“Medical offices thus represent a unique, resilient asset class poised to further benefit from strong fiscal tailwinds engendered by both the CARES Act and the US small business stimulus programme.”
The transaction is Allianz’s second US debt deal with Nuveen Real Estate, following its $94m financing of six industrial properties for the Nuveen US Cities Industrial Fund in 2020.
“We are delighted to have completed this latest transaction ,” said Christoph Donner, CEO, Allianz Real Estate of America. “Despite the volatility seen over the last 12 months, Allianz Real Estate has substantially expanded its U.S. portfolio, reaching a record USD 21.6bn AUM at the end of 2020, spanning equity and debt. We look forward to building on our commitment to the region.”
