An HRE firm finding opportunity, growth in forming partnerships with capital sources
According to numerous professionals involved in healthcare real estate (HRE), large capital sources, including foreign investors, have a record amount of “dry powder” they are anxiously looking to invest in medical office buildings (MOBs).
All of this interest presents opportunities for experienced, well-known HRE development, management and investment firms that perhaps do not have unlimited funds to acquire properties. Such firms can tap into all of that available capital by forming joint venture (JV) partnerships with large investors to acquire and/or develop MOBs and, perhaps, other types of healthcare properties.
At the last meeting of the Editorial Advisory Board of Healthcare Real Estate Insights, held in November 2017, Shane Seitz, with the U.S. Healthcare Capital Markets team at CBRE Group Inc. (NYSE: CBG), summed up this opportunity.
“If you’ve been a developer and have done property management and leasing, I think the opportunity is to (team up with) that capital that wants to come in and be their operating partner,” Mr. Seitz said. “They want … someone who knows what they’re doing and has those relationships to open up the door for them (instead of them having to) build something from the ground up.”
He then mentioned one of the companies doing just that, adding: “I think where there’s an opportunity is exactly what Anchor is doing.”
He was referring to long-time HRE firm Anchor Health Properties, which was founded as a development firm in Wilmington, Del., in the late 1980s by Paula Crowley and Lou Sachs.
Ever since CEO Ben Ochs merged his firm, Brinkman Management & Development, with Anchor in 2015, the company has utilized a number of strategies to grow, including pursuing development opportunities nationwide and forming partnerships with large capital sources to acquire properties.
To lead the acquisitions platform, Mr. Ochs hired James Schmid, formerly with CNL Healthcare Properties, as chief investment officer in 2016.
The strategy has certainly worked, and the company has followed up two strong years of investments with a strong start in 2018 as well, as it acquired more than $250 million worth of MOBs in the first half of the year.
Anchor has made its 2018 investments through its own investment program, through its existing investment partnerships with The Carlyle Group and Chestnut Real Estate, and through a new JV partnership with Morgan Stanley Real Estate Investing.
When Anchor acquired three East Coast MOBs earlier this year with Morgan Stanley, Mr. Ochs said “establishing this joint venture has allowed us to acquire three best-in-class investments in two of the highest profile U.S. markets, with a very long-term investment mindset.”
“The joint venture investments are a good complement to our existing successful investment programs, which also continue to grow rapidly and perform well with our existing investment partners,” he added. “We are fortunate to be able to work with some of the strongest and most well-respected equity capital partners in the world and hope to grow all of our investment relationships in the future.”
As for its growth, Anchor recently opened a new office in the Denver market, its 10th nationwide. According to its website, it continues to hire new people as well.
As Mr. Schmid notes, growth, including that achieved through JV partnerships, leads to new opportunities. “The momentum from our investment business line continues to drive opportunities across the U.S., leading to platform growth in strategic markets where we have established a meaningful presence.”