A real estate investment trust that issued its initial public offering of stock last summer has announced a $72.4 million investment in medical office buildings.
New York-based Care Investment Trust acquired the equity interests in limited liabilities entities that own nine medical office buildings with an estimated value of $263 million. The transaction, involving buildings with 767,000 square feet of space in Texas and Louisiana, closed on Dec. 31.
Care Investment acquired the equity interests from Cambridge Holdings, a Dallas-based developer, owners and manager of healthcare facilities. Cambridge typically develops and manages facilities in association with health systems and physicians.
The medical office buildings in this transaction include integrated facilities with specialty surgical hospitals, ambulatory surgery suites, radiation therapy and other diagnostic, treatment or imaging capabilities.
Care Investment acquired the equity interests through the formation of a new operating partnership subsidiary. The purchase price consisted of 700,000 operating partnership units valued at $10.5 million, as well as $61.9 million in cash. Care Investment said it used cash on hand and borrowed some through existing lending agreements.
The entities now owned with Cambridge carry $178.9 million in mortgage debt, with the mortgages maturing no earlier than 2016 and bear a weighted average interest rate of 5.86 percent, Care Investment documents showed.
The transaction also included an option that would enable Care Investments the right to purchase interests in six other medical office buildings in five states after the REIT satisfies various conditions. The value of the additional investment properties is about $232 million, the REIT estimated.
The properties in the Dec. 31 transaction are 50 percent occupied by hospital-related credit tenants and feature relationships with health systems that have high credit ratings, Care Investment said.
In its IPO last June, Care Investment offered 15 million shares of stock at $15 per share. The REIT was formed in 2007 by CIT Healthcare, a subsidiary of New York-based CIT Group.