Industry Pulse: January 2009

ORLANDO, Fla. – How in the world would one go about investing in medical office buildings (MOBs) in, perhaps, Europe, or Australia? Well, Orlando, Fla.-based CNL Financial Group and Sydney, Australia-based Macquarie Group Ltd. recently announced they are partnering up to establish a massive real estate investment trust (REIT) to pursue real estate opportunities around the world in nearly every sector of commercial real estate, including healthcare. The privately owned REIT would be called CNL Macquarie Global Growth Trust Inc., and the idea is to take advantage of what the partners consider a buyer’s market amid a meltdown in global commercial real estate. Investments would be made in retail, multi-family housing, industrial and office facilities, including MOBs. While the idea is quite big, the proposed total offering might be even bigger, at $1.5 billion. As part of the plan, officials with the REIT plan to use a certain amount of leverage when investing in properties, which they say could increase the spending purse to about $3 billion. The goal of the REIT is to have 30 percent of the assets located outside of the United States. Officials added in news releases that while they foresee plenty of opportunities to invest in real estate in the next two years, they also want to establish the REIT as a long-term player and investor. CNL and Macquarie plan on co-managing the REIT and hope to make it available to investors in the second half of 2009. CNL is a privately held real estate investment and development concern that has formed or acquired a variety of companies over the years, including CNL Retirement Properties (CRP), once one of the largest healthcare REITs in the country with 273 properties. In the second half of 2006, Long Beach, Calif.-based HCP Inc. (NYSE: HCP) acquired CRP in a deal estimated at $5.2 billion. Macquarie is a banking, financial, advisory, investment and funds management services provider that manages in excess of $180 billion in assets around the world.

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