Healthpeak Properties And Brookfield Form $2.1 Billion Outpatient Medical Real Estate Joint Venture
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Healthpeak Properties and Brookfield Asset Management have formed a long-term strategic joint venture involving 86 outpatient medical properties valued at approximately $2.1 billion. The portfolio contains about 5.6 million square feet across 11 states, including Kentucky, Indiana, Pennsylvania, Arkansas, Illinois, Minnesota, New Jersey and New York. It is approximately 95% leased and has a weighted average remaining lease term of six years. Brookfield and its affiliates acquired a non-controlling 49% interest in the venture. Healthpeak retained a 51% controlling stake and will continue serving as managing member. Healthpeak will provide asset management, leasing and property management services for the portfolio. The structure allows the healthcare real estate investment trust to maintain operational control and participate in future value creation while bringing in long-term institutional capital. Healthpeak received approximately $1.025 billion in gross proceeds from the sale of the 49% interest. The transaction implies a trailing cash capitalization rate of about 5.9% and a valuation of approximately $380 per square foot. A capitalization rate measures a property portfolio's annual operating income relative to its value. The disclosed rate provides an indication of the valuation applied to the portfolio's current cash flow. Healthpeak will have a call right for a limited...
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