Capital Markets

Capital Markets: MOB expense reimbursements

Expense reimbursements in leases have an impact on loan underwriting, terms By Erik Tellefson Medical office building (MOB) leases include expense reimbursements, which is the amount or percentage that the lessee pays the landlord for building expenses. The amount and type of the reimbursements are effectively whatever can be written into the lease. However, there […]

Capital Markets: MOB bridge loans provide flexibility

Shorter-term bridge lending options are an important borrower consideration By Erik Tellefson Bridge loans, as defined for this article, are typically shorter-term (three years or less) financing instruments that allow for a particular borrower or asset event to occur prior to a sale or more normalized financing.

Capital Markets: MOB equity recapture opportunities

Capital Markets: MOB equity recapture opportunities

Borrowers can benefit from recapitalizing via debt on under-levered assets By Erik Tellefson Medical office building (MOB) loans that reach maturity or their freely pre-payable period are often under-levered.

Capital Markets: MOBs with a high number of tenants

It’s important to use a lender with medical office experience when financing By Erik Tellefson Medical office buildings (MOBs) with a high number of tenants (average 1,500 square feet or less per tenant) are often found in metropolitan statistical areas with high population densities where space is at a premium and the subject tenancy utilizes […]

Capital Markets: Financing higher-acuity MOBs

Selecting a lender with healthcare expertise is paramount for those properties By Erik Tellefson In the current healthcare real estate landscape, medical office buildings (MOBs) that contain a higher acuity component, such as an ambulatory surgery center, surgical hospital or linear accelerator are becoming more prevalent.

Capital Markets: On-balance sheet fixed-to-float

Loans with these terms help to align the loan to the borrower’s business plan By Erik Tellefson A borrower’s business plan for an individual asset that requires flexibility after a certain period of time, coupled with the borrower’s desire to manage their interest rate risk, is a relatively common occurrence with medical office building (MOB) […]

Capital Markets: Extension options provide flexibility

Loan terms with extension options make it easier for borrowers to manage timing By Erik Tellefson The length of time between a loan closing and its maturity (loan term) is an important consideration when evaluating lending options. A loan term that is too short may not allow for the borrower to execute on its business […]

Capital Markets: ‘Lease-up’ MOBs have loan options

Capital Markets: ‘Lease-up’ MOBs have loan options

Financing can be structured to fund tenant improvements, leasing commissions By Erik Tellefson There are various financing opportunities depending on the stage of a medical office building (MOB), whether during construction/renovation, “lease-up” or stabilized. For example, MOBs with in-place tenancy of 65 to 80 percent, and a lease-up component for the remainder of the space […]

Capital Markets: Assumable loans increase options

A lender’s flexible structure and approach should be important for borrowers By Erik Tellefson Assumable loans generally allow for the debt to be assumed by another party, typically at the lender’s discretion and in exchange for an assumption fee. While an assumption provision may seem insignificant relative to more key loan terms like rate, term, […]

Capital Markets: Medical office building single assets versus MOB portfolios

An aggregation strategy can add diversification that is often accretive By Erik Tellefson Medical office buildings (MOBs), likely more so than many healthcare real estate assets, are often a single-asset real estate class. MOBs are often sold, purchased and financed as single assets, with the ultimate aggregation strategy goal of the purchaser being to put […]

Capital Markets: Financing ‘trophy’ MOB assets

It’s important to consider a lender’s expertise among other factors By Erik Tellefson The definition of a “trophy” medical office building (MOB) asset is relatively hard to pin down. But real estate professionals typically consider trophy assets as MOBs with large square footage (over 250,000 square feet), strong tenancy, solid space usage, and striking visual […]

Source: Data provided by Cain Brothers & Co. 
Disclaimer: The data is believed to be accurate but is not guaranteed. Wolf Marketing & Media LLC, publisher of HREI™, is not responsible for its accuracy.

Capital Markets: Volatility proves to be, well, volatile

Domestic markets, economy continue to react to global market troubles, issues The most recent month was marked by increased market volatility. From all-time-highs reached in mid-January, the S&P dropped 6.1 percent to 1,738 by Feb. 5. This was followed by a 7.5 percent rise to 1,868 by the end of the month. The VIX (a […]

Capital Markets: No ‘turning point’ yet in sight

Capital Markets: No ‘turning point’ yet in sight

With money flowing into stocks, hospitals feeling stress accessing bond market Have we reached an inflection point? That does not seem likely, as October was one of the most active months for IPOs since 2007. Most recently, we had the Twitter initial public offering (IPO), which minted 1,600 millionaires and generated $485 million and $1.72 […]

Capital Markets: What does the future hold for ACOs?

Capital Markets: What does the future hold for ACOs?

Return on investment looks to be shaky, but the model’s concept remains strong By now, everyone knows about the Accountable Care Organization (ACO) model, which was part in the Patient Protection and Affordable Care Act (PPACA) as part of the Medicare Shared Savings Program. Conceptually, ACOs should result in cost-savings for providers that assume certain […]

Capital Markets: Is the market in for stormy weather?

Capital Markets: Is the market in for stormy weather?

Healthcare REITs are feeling the brunt of recent interest rate uncertainty The market feels a little like the weather in the northern states just as winter arrives and a big, early season storm displaces the colors and the lingering warmth of fall. The last month or so has brought significant shifts in interest rates, market […]