Healthcare Realty Trust Announces Strategic Joint Venture With KKR
May 06 2024 - 6:45AM
Healthcare Realty Trust Incorporated (NYSE:HR) today announced that
it has entered into a strategic joint venture (JV) relationship
with KKR to jointly own and invest in quality medical outpatient
buildings. Healthcare Realty expects to receive approximately $300
million in proceeds for the contribution of a seed portfolio to the
JV and will partner with KKR to explore additional acquisitions,
including the potential contribution of more Healthcare Realty
properties to the JV.
Under the terms of the agreement, Healthcare Realty will
contribute 12 of its existing properties to seed the JV at a value
of $382.5 million, representing a cap rate of approximately 6.6%.
KKR will make an equity contribution to the JV equal to 80% of the
value of the properties. Healthcare Realty will retain a 20%
interest and will manage the JV, as well as continue to oversee
day-to-day operations and leasing of the properties. KKR has also
committed up to $600 million to the JV to pursue additional
acquisitions or contributions of high-quality stabilized assets
that are a match for its long-term capital base.
“Healthcare Realty is pleased to announce the formation of a
strategic relationship with KKR, a leading global investment firm,”
stated Todd Meredith, President and CEO. “We look forward to
collaborating with KKR to strategically invest in the medical
outpatient sector. In the near term, our capital allocation
priority is to repurchase stock on a leverage neutral basis.
Looking ahead, we may contribute additional Healthcare Realty
properties to the JV or pursue acquisitions, depending on market
conditions.”
“Healthcare Realty is a leading owner and operator of medical
outpatient buildings in the U.S. with a strong focus on quality
properties and serving tenants through best-in-class management,”
said Peter Sundheim, Managing Director at KKR. “This high-quality
portfolio is a great match for our long-term capital. We look
forward to collaborating on new investments at an opportune moment
when the current deleveraging cycle is impacting all types of real
estate, including in favored sectors with excellent long-term
fundamentals and demand drivers.”
The 12 properties to be contributed to the joint venture are
medical outpatient buildings in seven top markets located
predominantly on or adjacent to leading hospital campuses. The
properties comprise a total of 762,399 square feet and are 98%
occupied. The contribution of the properties is expected to occur
throughout May and June upon satisfaction of customary closing
conditions.
Eastdil Secured LLC and BlackBirch Capital served as Healthcare
Realty’s financial advisors. Latham & Watkins LLP served as
Healthcare Realty’s legal advisor.
Newmark’s Healthcare Capital Markets Group served as financial
advisor and Simpson Thacher & Barlett LLP served as legal
advisor to KKR. KKR is making this investment through capital
accounts advised by KKR.
About Healthcare Realty
Healthcare Realty is a real estate investment trust (REIT) that
owns and operates medical outpatient buildings primarily located
around market-leading hospital campuses. The Company selectively
grows its portfolio through property acquisition and development.
As the first and largest REIT to specialize in medical outpatient
buildings, Healthcare Realty’s portfolio includes nearly 700
properties totaling over 40 million square feet concentrated in 15
growth markets. Additional information regarding the Company can be
found at www.healthcarerealty.com.
About KKR
KKR is a leading global investment firm that offers alternative
asset management as well as capital markets and insurance
solutions. KKR aims to generate attractive investment returns by
following a patient and disciplined investment approach, employing
world-class people, and supporting growth in its portfolio
companies and communities. KKR sponsors investment funds that
invest in private equity, credit and real assets and has strategic
partners that manage hedge funds. KKR’s insurance subsidiaries
offer retirement, life and reinsurance products under the
management of Global Atlantic Financial Group. References to KKR’s
investments may include the activities of its sponsored funds and
insurance subsidiaries. For additional information about KKR &
Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com.
For additional information about Global Atlantic Financial Group,
please visit Global Atlantic Financial Group’s website at
www.globalatlantic.com.
Ron HubbardVice President, Investor RelationsP: 615.269.8290
In addition to the historical information contained within, the
matters discussed in this press release may contain forward-looking
statements that involve risks and uncertainties. These risks are
discussed in filings with the Securities and Exchange Commission by
Healthcare Realty, including its Annual Report on Form 10-K for the
year ended December 31, 2023 under the heading “Risk Factors,” and
in its Quarterly Reports filed thereafter and in the Company’s
other SEC filings. Forward-looking statements represent the
Company’s judgment as of the date of this release. The Company
disclaims any obligation to update forward-looking statements.
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