Transactions: Griffin-American REIT II invests $46 million on four separate MOB buys

NEWPORT BEACH, Calif. – Newport Beach-based Griffin-American Healthcare REIT II doesn’t seem to be having much trouble adding to its medical office holdings during what is supposed to be a tight MOB market.

In recent weeks, the non-listed healthcare REIT’s co-sponsors, American Healthcare Investors and Griffin Capital Corp., acquired five MOBs for the REIT’s portfolio, paying a total of about $46 million in four separate transactions. The acquired buildings are in or near Denver, Atlanta, Indianapolis and Detroit.

With the latest acquisitions, Griffin-American’s portfolio of healthcare assets has 153 buildings valued at about $1.42 billion, based on purchase price. The buildings, in 28 states, include MOBs, skilled nursing facilities (SNFs), hospitals and assisted living facilities (ALFs).
Since the start of 2012, the REIT has grown its portfolio by about 223 percent, based on purchase price.

Here’s a look at the MOBs recently acquired by Griffin-American, as announced by the REIT and with additional details obtained from RCA Inc.:

■ St. Anthony North Medical Office Building II, Westminster, Colo. Griffin-American paid $4.1 million for the 27,145 square foot building, or $151 PSF. Located adjacent to the 138-bed St. Anthony North Hospital in the Denver suburb of Westminster, the building’s tenant roster includes the hospital, which is part of Englewood, Colo.-based Centura Health, a family practice, a cardiovascular group, and others. It is 89 percent leased. The REIT also owns a 60,000 square foot MOB on the campus that it acquired in 2011. The building was completed in 1972 and renovated in 2005. The seller was a partnership of Englewood-based Centum Health Properties and Boulder, Colo.-based Signature Partners.

■ Ultima at Eagles Landing Medical Office Building, Stockbridge, Ga. The two-story, 45,000 square foot multi-tenant MOB is adjacent the 215-bed Piedmont Henry Hospital in the Atlanta suburbs. Built in 2004, the building is 100 percent leased to four tenants, the largest of which are Eagles Landing OB/GYN, an affiliate of the Piedmont Clinic, and Atlanta Heart Associates. A total of 86 percent of the building is leased through June 2022. The seller was Ultima at Eagles Landing LLC, which was represented in the transaction by Paul Zeman of Atlanta-based Bull Realty.

■ Riverview Medical Arts Building, Noblesville, Ind. The 44,000 square foot building is part of a two-building, outpatient campus located in fast-growing Hamilton County in the Indianapolis suburbs. Built in 2008, the facility is 100 percent leased to seven tenants, the largest of which is the 154-bed Riverview Hospital, located a short distance away in Noblesville and which leases nearly 59 percent of the building through December 2017. The seller was Indianapolis-based Cornerstone Cos. Inc.

■ Keystone Medical Center, Novi, Mich. The three-story, 52,770 square foot building has multiple tenants, including Michigan Head & Spine Institute and Women’s Health Consultants, and is located at 46328 W. 12 Mile Rd., just across the freeway from the new 200-bed St. John Providence Park Hospital, part of Ascension Health. The MOB was sold as part of a two-building portfolio that includes the West Oaks building listed below. Griffin-American acquired the buildings from Bloomfield Hills, Mich.-based RSM Development & Management. The broker for the portfolio was Spencer Coan of Atlanta-based Ackerman & Co.

■ West Oaks MOB, West Bloomfield, Mich. The 41,230 square foot, two-story multi-tenant MOB is about 2.5 miles from the 191-bed Henry Ford West Bloomfield Hospital. Located at 33200 W. 14 Mile Rd., the building was completed in 1975 and renovated in 1990.

Griffin-American says it financed the acquisitions through the assumption of $6.3 million of existing debt, $33.9 million in borrowings under its unsecured line of credit with Bank of America NA, cash on hand and units of limited partnership of Griffin-American Healthcare REIT II Holdings LP, the REIT’s operating partnership.

The units of the operating partnership were issued to the sellers of Riverview Medical Arts Building as partial payment for the acquisition.