Company Announces Planned Acquisition of
Three Hospitals Under Contract for $68 million
Global Medical REIT Inc. (NYSE:GMRE) (the “Company” or “GMR”), a
Maryland corporation engaged primarily in the acquisition of
licensed, state-of-the-art, purpose-built healthcare facilities and
the leasing of these facilities to leading clinical operators with
dominant market share, announced today that it has entered into
purchase contracts to acquire three rehabilitation hospitals for an
aggregate purchase price of $68,093,000. The three hospitals,
discussed further below, are HealthSouth rehabilitation hospitals
in Mesa, AZ, Altoona, PA and Mechanicsburg, PA.
David Young, Chief Executive Officer of GMR, stated, “I am very
happy to announce that the Company has entered into purchase
contracts to acquire three hospitals from affiliates of Healthcare
Realty Trust, each of which is leased to HealthSouth Corporation
under long-term triple net leases that we will assume upon closing.
This transaction will represent a significant milestone in our
continuing efforts to deploy the proceeds raised in our IPO that
was completed in July. In addition, the credit facility announced
with our third quarter results, along with capital that will become
available as we place debt on various properties in our portfolio,
will provide us with ample funding to facilitate our increasing
pace of acquisitions in the near term.”
As indicated above, GMR intends to complete the three
acquisitions in all-cash transactions using proceeds from the
Company’s IPO. The Company intends to place debt on the properties
subsequent to closing. In total, the three hospitals add
approximately 196,000 square feet to GMR’s property portfolio while
also yielding cap rates consistent with the Company’s existing
property portfolio. These three transactions are contingent on each
other, so the Company will not close one without closing the other
two. The sellers are affiliates of Healthcare Realty Trust
Incorporated (NYSE: HR). The Company’s due diligence period under
each agreement expires on December 8, 2016, at which time its
earnest money deposits become non-refundable. The Company has the
right to terminate at any time prior to the expiration of the due
diligence period. The Company expects to close the three
acquisitions during the fourth quarter of 2016, subject to the
satisfactory completion of due diligence and other customary
closing conditions. There is no assurance that the Company will
close these three acquisitions.
HealthSouth East Valley Rehabilitation Hospital –
Mesa, AZ
Serving the residents of Mesa and East Valley, AZ, the hospital
is a 60-bed rehabilitation facility which was opened in 2009 and
contains approximately 52,000 square feet. The purchase price for
the Mesa hospital will be $22,350,000, and the property is leased
to HealthSouth Mesa Rehabilitation Hospital, LLC under a triple-net
lease agreement that the Company will assume at closing with a
remaining term of approximately 8 years, subject to four 5-year
renewal options by the tenant. The lease is guaranteed by
HealthSouth Corporation. The aggregate annual rent for the Mesa
properties is currently $1,660,793, subject to 3% annual rent
escalations.
HealthSouth Rehabilitation Hospital of Altoona –
Altoona, PA
The 80-bed, approximately 64,000 square-foot inpatient
rehabilitation hospital specializes in the treatment and
rehabilitation of amputations, brain injury, neurological
disorders, orthopedic conditions, spinal cord injury, and stroke.
On-site services include imaging, pharmacy, dental services,
laboratory services, renal dialysis, therapeutic radiology,
electrical stimulation therapy, upper extremity robotics,
diagnostic tools for balance disorders, and Visi-Pitch IV. The
purchase price for the Altoona hospital will be $21,545,000, and
the property is leased to HealthSouth Corporation under a
triple-net lease agreement that the Company will assume at closing
with a remaining term of approximately 4.5 years, subject to two
5-year renewal options by the tenant. The annual rent for the
Altoona facility is currently $1,635,773, subject to annual rent
escalations based on increases in the CPI, but not greater than 4%
nor less than 2%.
HealthSouth Rehabilitation Hospital of Mechanicsburg –
Mechanicsburg, PA
The hospital offers specialized inpatient rehabilitation
services, including imaging, laboratory services, a pharmacy, and
orthotics to promote rehabilitation from conditions such as joint
replacements, stroke, Parkinson’s disease, spinal cord injuries,
and traumatic brain injury. The facility covers approximately
80,000 square feet and contains 75 beds along with 2 private and 35
semi-private rooms. The purchase price for the Mechanicsburg
hospital will be $24,198,000, and the property is leased to
HealthSouth Corporation under a triple-net lease agreement that the
Company will assume at closing with a remaining term of
approximately 4.5 years, subject to two 5-year renewal options by
the tenant. The annual rent for the Mechanicsburg facility is
currently $1,836,886, subject to annual rent escalations based on
increases in the CPI, but not greater than 4% nor less than 2%.
About Global Medical REIT Inc.
Global Medical REIT Inc. is a Maryland corporation engaged
primarily in the acquisition of licensed, state-of-the-art,
purpose-built healthcare facilities and the leasing of these
facilities to leading clinical operators with dominant market
share. The Company intends to produce increasing, reliable rental
revenue by expanding its portfolio, and leasing each of its
healthcare facilities to a single market-leading operator under a
long-term triple-net lease. The Company’s management team has
significant healthcare, real estate and public real estate
investment trust experience and has long-established relationships
with a wide range of healthcare providers. The Company intends to
elect to be taxed as a REIT for U.S. federal income tax purposes
commencing with our taxable year ended December 31, 2016.
Forward-Looking Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Exchange Act, pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by
the use of words such as “anticipate”, “believe”, “expect”,
“estimate”, “plan”, “outlook”, and “project” and other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. Forward-looking
statements should not be read as a guarantee of future performance
or results, and will not necessarily be accurate indications of the
times at, or by, which such performance or results will be
achieved. Forward-looking statements are based on information
available at the time those statements are made and/or management’s
good faith belief as of that time with respect to future events.
These statements relate to, among other things, the Company’s
expectations regarding the completion of the acquisitions described
in the press release on the terms and conditions described herein,
the expected closing dates of these acquisitions; and the expected
lease terms. These forward-looking statements are subject to
various risks and uncertainties, not all of which are known to the
Company and many of which are beyond the Company’s control, which
could cause actual performance or results to differ materially from
those expressed in or suggested by the forward-looking statements.
These risks and uncertainties are described in greater detail in
the Company’s filings with the United States Securities and
Exchange Commission (the “Commission”), including, without
limitation, the Company’s annual and periodic reports and other
documents filed with the Commission. Unless legally required, the
Company disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise. The Company undertakes no obligation to update these
statements after the date of this release.
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version on businesswire.com: http://www.businesswire.com/news/home/20161130005434/en/
Investor Relations CounselThe Equity Group Inc.Jeremy Hellman,
212-836-9626Senior Associatejhellman@equityny.comorAdam Prior,
212-836-9606Senior Vice Presidentaprior@equityny.com
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