Healthcare Realty Trust Inc. and Teachers Insurance and Annuity Association (TIAA) have formed a joint venture to invest in medical office buildings.
Healthcare Realty will manage day-to-day operations and leasing of the properties in the joint venture. The company will own a 50% interest in the joint venture and will fund its pro-rata share of future investments.
The joint venture intends to purchase approximately $200 million of properties annually and does not contemplate using property level debt in most instances.
On November 12th, the joint venture purchased its first property for $16.6 million at a 5.1% cap rate. The 92,139 square foot building is located on Allina Healthcare’s Mercy campus in Minneapolis. The joint venture will seek to realize additional value through the lease up of the 80% occupied building. Property level debt was not associated with this initial acquisition.
The Company intends to provide additional disclosure in its future quarterly supplemental materials regarding properties owned by the joint venture. BlackBirch Capital served as advisor to Healthcare Realty on this transaction.