KATY, Texas – Physicians Realty Trust, a Milwaukee-based REIT, has acquired a medical office building adjacent to a Memorial Hermann facility in Katy for $40.4 million.
Marcus & Millichap arranged the sale of the 108,066-square-foot, two-building, medical office portfolio anchored by a Memorial Hermann Rehabilitation Hospital and Ambulatory Surgery Center.
Scott Niedergang and Gino Lollio, vice presidents investments and directors of Marcus & Millichap’s Healthcare Real Estate Group in the firm’s downtown Chicago office, represented the seller, a partnership inclusive of local private investors and physicians practicing in the facilities.
“This transaction reflects a national trend occurring in the healthcare real estate marketplace,” said Niedergang. “As physician groups make the decision to sell their practices to health systems a credit enhancement of the rent roll occurs resulting in a significant increase in property value. In this case, the sale of the Rehab Hospital and Surgery Center operations to Memorial Hermann increased the value of the buildings substantially.”
“This increase in value was confirmed by an expansive marketing process that created a competitive bidding environment and yielded offers from the most aggressive private investors, healthcare real estate funds, private equity firms and real estate investment trusts,” said Lollio. “Additionally, prior to starting the marketing process, our team was able to advise ownership on negotiating a brand new 10-year lease with the surgery center which created more value for the seller.”
Memorial Hermann is the largest not-for-profit healthcare system in Southeast Texas with 13 hospitals and numerous specialty programs and services in the Great Houston area. The Katy community, just West of Houston, has seen an 83 percent increase in population since 2000