Cover Story: Thomas Park is ready to keep investing

In a Q&A, Alex Kopicki, chief investment officer, discusses the firm’s growth, prospects

By John B. Mugford

Annapolis-based Thomas Park Investments (TPI) grabbed a headline recently, as the 2-1/2-year-old investment firm focused on healthcare real estate (HRE) facilities acquired a complex of two medical office buildings (MOBs) with a combined 124,213 square feet in Southboro, Mass.

Information from data firm Revista indicates the price was $17.62 million, or about $142 per square foot (PSF), for the facilities at 24 and 32 Newton St. that are anchored by Worcester, Mass.-based Reliant Medical Group, which has 20 locations, and Worcester-based UMass Memorial Health.

According to a news release from the firm, the “off-market” transaction “involved a complex and strategic approach, showcasing Thomas Park Investments’ expertise in navigating challenging real estate deals with multiple stakeholders.” It also noted that during the due diligence process, Thomas Park “renegotiated a 97,000 square foot lease extension with Reliant Medical Group, solidifying the property’s stability and the investment’s long-term value proposition.”

In that same news release, Alex Kopicki, the chief investment officer and one of three principles along with founder and CEO EJ Rumpke as well as Gene Parker, the chief operating officer, said the purchase of the complex was a “dynamic, challenging and rewarding journey. We were able to execute most of our business plan during the due diligence phase, which is always a great achievement and took a lot of effort from many team members. This strategic investment solidifies our ability to perform on any transaction within the healthcare clinical space no matter the size or complexity.”

TPI bills itself as one of the fastest-growing private equity real estate investment firms on the East Coast, as it has grown its assets under management (AUM) to more than $300 million since its founding in late 2019. The property management affiliated business, Thomas Park Management (TPM), manages about 8.5 million square feet of commercial real estate (CRE) space.

The news of TPI’s in Massachusetts acquisition comes at a time when MOB acquisitions have slowed due to rising interest rates, difficult-to-obtain debt, a bid-ask gap when it comes to pricing, and other factors. HREI™ reached out to Mr. Kopicki to learn more about the firm’s current activities and its strategies for getting deals done in a challenging market.

HREI: Can you give us a condensed version of the history of Thomas Park Investments and your entry into the healthcare real estate sector? Also, what is your main focus, both in terms of product type, perhaps price range, geography, etc.? And what types of investors are investing with you?

Kopicki: Thomas Park was founded by my business partner, EJ Rumpke, in late 2019. It takes courage to start up a new business, which is something the two of us are familiar with, in that we’ve worked together previously in other startup ventures. We are familiar with the level of commitment and risk tolerance required to endure through the early years of starting a firm.

Despite the challenging combination of starting a new business and the onset of a global pandemic, EJ and I were able to clearly articulate our investment strategy through a healthcare-focused lens. We each had experience developing and buying medical outpatient facilities and believed in the longevity of the value proposition that healthcare real estate presented.

Since 2021 we’ve been busy with exciting growth. We’ve completed two programmatic joint ventures, one with a leading private equity (PE) firm and another with a leading real estate investment trust (REIT).

We also raised our first fund, Thomas Park Growth Fund I, an investment vehicle anchored by a leading insurance company. Through a lot of hustle and our great partners, we’ve expanded our portfolio geographically from Boston to Raleigh, N.C., and we’ve aggregated over $300 million of AUM. With our proven track record and health system relationships, there’s no limitations to deal size and anything east of the Mississippi is within our reach.

While the acquisitions have been exciting, establishing our corporate culture and staying true to our core values has been equally rewarding. We are lucky to be attracting amazing talent and working with some best-in-class CRE professionals. The best part is we’re only in the first inning for where we’d like to take Thomas Park.

HREI: How active has Thomas Park been in making investments? Do you have annual targets, and are you meeting those goals lately? And how big is the portfolio now?

Kopicki: Our portfolio today consists of over $300 million of AUM. That has predominantly transpired over the course of the last 2-1/2 years. We purchased just under $150 million of outpatient clinical buildings in 2022 and remain on track to hit a similar target this year.

HREI: Do you manage your properties?

Kopicki: We do perform our own management. We currently manage over 1 million square feet of our own account and over 7.6 million square feet for third-party clients. Our third-party work is a mix of asset types that spans beyond medical. We are actively expanding our third-party business, especially within the healthcare space.

HREI: As everyone in the sector is aware, the MOB acquisitions market has slowed down in the past couple of quarters, maybe even the past three or four quarters. What do you mainly attribute this to, and how much has it affected TPI? When you do find opportunities, how have you done so?

Kopicki: We are fortunate in the outpatient clinical space that fundamentals are strong and there’s still capital available — it’s just expensive capital compared to where we were when rates were effectively zero. Overall, we must remind ourselves that our niche within commercial real estate has much less overall variability due to strong fundamentals, so values will stay within a tighter band than other asset types. Lenders shouldn’t be afraid of the word ‘office,’ so long as it’s paired with ‘medical office’ and is a true clinical building.

This interest rate environment has, however, significantly dampened overall transaction volumes. We started this year with an objective to make $250 million in acquisitions, and that, it seems, was overly optimistic. If owners don’t have to sell into this market for a specific reason, most will want to wait until capital markets thaw and get to the other side of the yield curve.

We have a variety of tactics for finding deals. However, of late, it’s nice that we are seeing some repeat business buying multiple assets from the same seller. I’m proud of this. It’s proof positive that we do our business with a high level of integrity, honesty, and professionalism giving the sellers comfort that we can perform.

HREI: Despite the current conditions, what are TPI’s long-term prospects and feeling about being involved in healthcare real estate? And can you explain why you feel this way?

Kopicki: A wise, since retired, chief health officer of a major health system defined the U.S. healthcare system in the following way and it has stayed with me over the years: ‘Navigating the U.S. healthcare system is like wrestling with eels. You can just never quite get your arms around it.’ I agree, as the system is big and complex with multiple constituents and hard to navigate in its entirety. As a result, we’ve tried to make it more manageable through a deeper understanding by region versus full comprehension of the entire mosaic. Overall, anyone in this niche of CRE will point to the compelling demographic trends occurring right now with the acceleration of clinical needs being the great demand-side driver. We have a very positive outlook for the sector.

HREI: What makes Thomas Park Investments tick? Can you tell us something about the firm that perhaps makes you stand out in the marketplace, or perhaps that people in the sector might not know?

Kopicki: Between EJ and I, we have seven daughters. Hence, you can understand the ‘hustle’ as part of our core values. Undoubtedly, we will be at this for a while. But in all seriousness, part of what differentiates us is that we make sure we are always doing the right thing versus just saying the right thing. We have surrounded ourselves with a great group of partners and teammates. And we are never satisfied with the status quo.

That’s one of the reasons why we started Thomas Park University (an in-house educational program for employees taught by industry professionals) – to fill in any skills gaps for our team of 70 plus to advance themselves while delivering further value to our partners and clients. We believe in life-long learning, and this is a great platform to put that belief into action. 