Lender reports $2 billion of deals; team leader Jonathan Buehner talks with HREI
By John B. Mugford
Jonathan “Jon” Buehner
Last year, in releasing its mid-year 2024 report, the Capital One Medical Properties team, a unit of McLean, Va.-based Capital One Financial Corp. (NYSE COF), said it had closed, or was in the process of underwriting, about $1.2 billion of deals.
That was during a time of a pronounced slowdown in the sales of medical outpatient buildings (MOBs), and it was also a time when many healthcare real estate (HRE) professionals noted that lending in the sector was quite tight for acquisitions and development projects.
So far this year, MOB sales have yet to rebound to levels anywhere near the go-go years before the COVID-19 pandemic, or even the strong years of 2021-22. However, most HRE professionals are saying that debt is more available than it has been for the past two years or so, including debt for portfolio acquisitions and other larger deals topping $100 million.
The uptick is reflected in the latest data released by Capital One Medical Properties, which is part of the Capital One Healthcare Real Estate business.
Capital One’s Medical Properties team, which is the largest lender in the MOB space, says it closed or had in underwriting more than 20 deals topping $2 billion during the first half of this year. That’s an increase of about 67 percent over the first half of 2024, and the team adds that it has a “very strong pipeline for the second half of the year.”
Jonathan “Jon” Buehner, medical office commercial leader with Capital One, notes that the Capital One “team is off to a great start in 2025 and we’re looking forward to executing on a large pipeline in the second half of this year.”
Among several larger loans that Capital One was involved with in the first half was a transaction in which it was the “lead left,” or the lead bank of the marketing and syndication process, in “agenting” a $142 million senior secured loan for the partnership of Chicago-based Remedy Medical Properties and Boca Raton, Fla.-based Kayne Anderson Real Estate for its purchase of an MOB portfolio. Mr. Buehner declined to provide additional details about that transaction, but HREI™ believes that the financing was for the acquisition of a portfolio of MOBs in northern Virginia that closed in mid-June. To read HREI’s coverage of that transaction, please click here.
Another significant acquisition loan had Capital One act as the lead left when it “agented a $69 million senior secured loan” for Nashville, Tenn.-based Montecito Medical Real Estate to finance its acquisition of 10 MOBs in eight states.
Capital One also acted as lead lender on a $103 million refinancing of three HRE assets for White Plains, N.Y.-based Rethink Healthcare Real Estate.
The HRE team at Capital One – which was previously with GE Capital Healthcare Financial Services, which was acquired in 2015 by Capital One – says it “has financed more than $45 billion in balance sheet debt in the medical office, medical properties, healthcare-focused REIT and life sciences segments” since 2010.
HREI recently caught up with Mr. Buehner, the medical office commercial leader, to talk a bit more about the first half and what he foresees for the lending and acquisitions market, as well as for Capital One, in the near future.
HREI How much did Capital One Medical Properties end up financing in all of 2024? And, it looks like the first half of last year was about $1.2 billion. Why has this increased substantially so far in 2025?
Buehner: The Medical Properties team closed deals totaling over $3.2 billion in loan commitments in 2024. The year-over-year increase (in 2025) was driven by a combination of the Capital One Healthcare team continuing to execute on our strategy of broadening our relationships with our existing sponsors and a pick-up in lending market activity, both on new acquisitions and refinances of existing loans.
HREI: Do you have an indication of what all of 2025 will end up being in terms of volume?
Buehner: Based on our existing pipeline and deals in the current market, we anticipate a very strong second half of 2025 and hope to see volume similar to the first half of 2025.
HREI: So far in the first half of 2025, I’m not sure MOB sales are up all that much from 2024, but do you foresee more activity happening in the second half compared to last year? If yes, why do you think this is true, and why have things changed?
Buehner: Yes, we expect the second half of 2025 to be significantly stronger than last year. Looking at the deals currently in the market, including several larger portfolios, we expect a majority of these deals to transact later this year, contributing to a strong MOB sale volume.
HREI: As a lender, what has changed from 2024 or the previous year and a half or so? Is there more stability with rates, more interested sellers/buyers, etc.?
Buehner: No major changes from the lending side – lender spreads have stayed relatively consistent with index rates coming down from previous years, contributing to more favorable all-in rates for borrowers. We continue to see new buyer interest driven by the medical office sector’s strong underlying fundamentals and a history of stable and reliable performance through multiple cycles.
HREI: Last year, you told us that Capital One had gotten pretty creative with the types of loan structures it was using. Is that still true, or are you back to more standard types of loans?
Buehner: Our goal is to offer our clients bespoke lending structures to finance the acquisition and development of healthcare real estate. Our client-focused approach, leveraging on-balance sheet relationship lending and healthcare domain expertise, coupled with strong certainty of execution, enables borrowers to execute on their business plans. We offer a range of financing solutions, including agenting and leading large healthcare real estate portfolio transactions, structured loan pools allowing borrowers to efficiently aggregate multiple acquisitions into one loan facility, and a unitranche product to help borrowers who are strategically seeking higher leverage.
HREI: Anything else that people in the sector should know about what is taking place in the lending arena, or at Capital One?
Buehner: We are a trusted lender to sponsors because we employ a client-focused relationship lending approach to deliver on our commitments and ensure our clients achieve their strategic growth objectives. The team is off to a great start in 2025. We’re green-lit for the MOB asset class and looking forward to executing on a large pipeline in the second half of this year. ❏
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