Pension Fund Sale

Client Situation

Looking to replace a major state pension fund and a comingled joint venture with a large public healthcare REIT, the pension fund manager retained Savills Studley to sell its super majority interest in a 3.8 million square foot portfolio of class A medical office buildings.

Consideration Analysis

Savills Studley, representing the pension fund, created a fully vetted marketing collateral showcasing the portfolio highlights. The properties were managed and leased by a wholly-owned division of the REIT, all were directly affiliated with 13 leading healthcare systems and the total portfolio consisted of three sub-portfolios located across ten states.

The transaction required careful structuring to avoid various hospital Rights of First Refusal and Rights of First Offer contained in the ground leases and property management approval rights, and to secure requisite shareholder approval and minimize real estate reevaluations and transaction exposure.

Result

Savills Studley leveraged the team’s combined unique set of knowledge and capable equity investors on behalf of the fund. Two of the three sub-portfolio joint venture interests totaling approximately 2.2 million square feet were transferred to a joint venture partner for a total of approximately $380 million. In addition, two assets from the third portfolio totaling approximately 200,000 square feet were transferred to the joint venture partner for a total of approximately $57 million while a third asset was sold to a REIT.

Summary Information

  • Property: Various, USA
  • Transaction Size: 2.4 Million SF
  • Transaction Type: Portfolio Recapitalization
  • Service Line: Healthcare