Healthcare Realty Trust Provides Update on Atlanta Portfolio Acquisition
September 27 2017 - 4:36PM
Healthcare Realty Trust Incorporated (NYSE:HR) has entered
into an amended and restated agreement with Meadows & Ohly, LLC
to acquire eight medical office buildings totaling 496,000 square
feet in the Atlanta, Georgia market (the “Portfolio”) for an
aggregate purchase price of $193.8 million, which represents a 2018
cash yield of 5.2%. The Company had previously agreed to
purchase these eight properties for $204.5 million at a 2018 cash
yield of 4.9%.
The eight properties in the Portfolio include seven on-campus
medical office buildings located on three WellStar Health System
(“A” rated) campuses and one off-campus medical office building
fully leased by Piedmont Healthcare (“AA-” rated) with 13 years of
remaining lease term. The seven on-campus properties are 58.3%
occupied by WellStar and 95.5% occupied overall. WellStar
operates 11 hospitals, generated $2.2 billion of revenue in 2016,
and has a 21.0% market share, making it the leading health system
in the Atlanta MSA.
The transaction is expected to be funded with net proceeds from
the Company’s August equity offering and $33.9 million of assumed
debt bearing an average interest rate of 3.8%. The Company expects
the closings of the eight properties to occur throughout the fourth
quarter of 2017, subject to timing of loan assumptions.
The original agreements provided for the acquisition of 15
properties comprising 1.3 million square feet at an aggregate
purchase price of $612.5 million. Fourteen of the properties were
subject to purchase rights held by the three associated health
systems. The health systems exercised rights to purchase seven
properties valued at $408.0 million. The Company had the right to
terminate the transaction if more than $300 million in properties
were removed through the exercise of health system purchase rights.
The Company has elected to purchase the remaining eight properties,
originally valued at $204.5 million, at a reduced price of $193.8
million. The Company’s acquisition of the eight remaining
properties is not subject to any outstanding purchase rights.
Healthcare Realty Trust is a real estate investment trust that
integrates owning, managing, financing and developing
income-producing real estate properties associated primarily with
the delivery of outpatient healthcare services throughout the
United States. As of June 30, 2017, the Company had gross
investments of approximately $3.6 billion in 197 real estate
properties in 26 states totaling approximately 14.5 million square
feet. The Company provided leasing and property management services
to approximately 10.9 million square feet nationwide.
Additional information regarding the Company can be found at
www.healthcarerealty.com. Please contact the Company at
615.269.8175 to request a printed copy of this information.
In addition to the historical information contained within, the
matters discussed in this press release contain forward-looking
statements that involve risks and uncertainties. These risks
include, without limitation, the Company’s ability to complete the
acquisition on the anticipated timeline or at currently anticipated
costs, targeted capitalization rates, or targeted stabilized
yields, or at all, and other risks as more fully described in
filings with the Securities and Exchange Commission by Healthcare
Realty Trust, including its Annual Report on Form 10-K for the year
ended December 31, 2016 under the heading “Risk Factors,” and as
updated in its Quarterly Reports on Form 10-Q filed thereafter.
Forward-looking statements represent the Company’s judgment as
of the date of this release. The Company disclaims any obligation
to update forward-looking statements.
Carla BacaDirector of Corporate CommunicationsP:
615.269.8175
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