Newmark’s Healthcare Capital Markets Group Advised Cornerstone Companies and worked in Partnership with its Debt and Structured Finance Practice to Procure Financing for the Joint Venture
New York, NY (October 12, 2021) — Newmark announces the firm has advised on the recapitalization of a 25-property medical office building portfolio on behalf of Indianapolis-based Cornerstone Companies, Inc. The $215 million portfolio will serve as a seed investment for a newly-formed strategic joint venture between Cornerstone and KKR, a global investment firm, which will initially invest an additional $1 billion in healthcare acquisition and development opportunities on a programmatic basis.
Newmark’s Healthcare Capital Markets’ Senior Managing Director Jay Miele, Executive Managing Director Ben Appel, Senior Managing Director Michael Greeley, Managing Director John Nero and Associate Ron Ott advised Cornerstone and KKR on establishing the Joint Venture and represented Cornerstone on the portfolio recapitalization transaction. In addition, the team worked in partnership with the firm’s Debt and Structured Finance practice to procure acquisition financing for the investor, providing a seamless completion of the capital stack for the transaction.
“We were very pleased to have the opportunity to represent Cornerstone and KKR in this important portfolio transaction, which generated significant market interest given its concentration of strategically aligned properties with long-term lease commitments by leading healthcare providers,” said Jay Miele. “The formation of the programmatic joint venture will allow for an increase in healthcare real estate transaction volume built on the prior successes of Cornerstone Companies, Inc,” added John Nero.
The seed portfolio totals 713,705 square feet of medical office buildings and ambulatory surgery centers. The properties are 94% leased to leading healthcare systems, physician group practices, and surgery center operators and represent the successful aggregation of investments from several Cornerstone private equity fund vehicles from select partners.
“KKR is one of the world’s largest investment firms with incredible connectivity across industries, including deep experience investing in the healthcare and real estate sectors,” said Tag Birge, President and CEO of Cornerstone. “This strategic partnership significantly increases our reach and capacity to deliver investment and development solutions for leading physician groups and health systems. We are very excited to work with a partner in KKR who shares our commitment to lasting client relationships and a strong focus on portfolio construction and underwriting.”
“We are pleased to collaborate with the highly-regarded team of industry specialists at Cornerstone to invest in a scaled portfolio of healthcare properties,” said Peter Sundheim, Director at KKR. “The recapitalization of 25 well-situated seed assets creates a strong foundation for our Joint Venture.”
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Our comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, growing startups to leading companies. In 2020, Newmark generated revenues in excess of $1.9 billion. Newmark, together with London-based partner Knight Frank and independently owned licensees, operates globally from approximately 490 offices with 19,300 professionals. To learn more, visit nmrk.com or follow @newmark.
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