Project: Tenent South Florida Medical Office Portfolio
Size: 636,091 Sq. Ft.
Purchase Price: $46,650,000
Sale Price: $75,084,000
Equity Invested: $18,068,363
Equity Realized: $45,140,837
Hold Period: 3 Years
IRR: 41.0%
Equity Multiple: 2.5x
Portfolio:
The South Florida Medical Portfolio consisted of eight medical office buildings totaling 636,091 square feet located on five different hospital campuses throughout South Florida. The buildings were poorly leased with significant near term rollover and below market rents. The buildings also required substantial maintenance and capital repairs. The seller, Tenet Healthcare, did not focus attention to the assets.
Strategy:
We repositioned and rebranded the portfolio to a higher asset class with significant improvements and upgrades to the buildings’ exterior, mechanical systems and common areas ($6 million). We significantly improved tenant satisfaction by introducing our gold standard management and leasing platform, providing a dramatically higher of level service. We converted many leases from gross to NNN or gross with expense stops.
Results:
Our team created an institutional grade portfolio with a stable and diversified rent roll and market leases. We increased occupancy in the two significant buildings (Palmetto Medical Plaza and the Victor Farris Building) from 78% to 85% (We increased overall occupancy by 5%). We grew stabilized net operating income by 21%. Six of the eight buildings in the portfolio were sold after a three year hold period, to a publicly-traded REIT (HTA).
**Select individual building case studies shown below.
