Transaction Overview
Healthcare Real Estate Capital (“HRE Capital”) acted as a financial advisor in the creation of a joint venture (“JV”) between American Academic Health System (“AAHS”), an affiliate of Paladin Healthcare, and Harrison Street Real Estate Capital (“HSRE”) related to the sale / master leaseback, acquisition and renovation of a four-building, 928,279-square foot medical office portfolio and 1,620-spaces of structured parking (the “Portfolio”) across two hospitals campuses in Philadelphia, Pennsylvania. The JV was structured to facilitate AAHS’s acquisition and operational turnaround of the 496-bed Hahnemann University Hospital, the academic medical center of Drexel University’s College of Medicine, and the 189-bed Saint Christopher’s Hospital for Children (the “Hospitals”).
HRE Capital’s Role
On behalf of AAHS, HRE Capital undertook a selective effort to identify a well-capitalized investor (“Investor”) positioned to (i) acquire certain real estate assets simultaneously with the acquisition of the Hospital operations and acute-care facilities, (ii) fund significant improvements across the Portfolio and (iii) pursue additional future development opportunities. Leveraging HRE Capital’s knowledge of the healthcare real estate capital markets, AAHS ultimately chose to work with the HSRE as the preferred Investor. With the HSRE’s significant institutional expertise in the healthcare real estate sector, the JV was crafted in a highly restrictive timeframe and allowed AAHS to meet other goals related to working capital needs and the ability to participate in future potential upside, among others.
Healthcare Real Estate Capital
HRE Capital is a national advisory firm focused solely on the healthcare real estate sector. Our clients include many of the nation’s top healthcare providers and developers / investors of healthcare real estate. HRE Capital’s focused model provides clients with an unmatched level of relevant experience and independent transaction analysis, structuring and execution capabilities. Providing both consultative and transaction oriented services, including asset / portfolio joint venture structuring, recapitalizations, dispositions and other related real estate advisory services, HRE Capital’s senior management team has been involved with over $9 billion in healthcare real estate transactions.
American Academic Health System
AAHS is an investor and operator that makes private equity, structured debt and real estate investments in the healthcare sector, with a core focus on underperforming urban and suburban academic medical centers. With a highly experienced and successful management team with broad collective strengths, AAHS has successfully implemented turnaround strategies across five hospitals and over 750 beds.
Harrison Street Real Estate Capital
HSRE is one of the leading real estate investment management firms exclusively focused on the education, healthcare and storage sectors. The firm has created a series of differentiated investment products across multiple risk / return strategies. Headquartered in Chicago and with an office in London, the firm has 115 employees and approximately $12.8 billion in assets under management.
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