HCSHQ_102021

Page 8 — Health Care & Senior Housing Quarterly — October 2021 www.crej.com HEALTH CARE — TRENDS O nce considered a niche or alternative investments, medical office buildings and other health care real estate have notably outperformed most other commercial real estate asset classes during both the Great Recession of 2007-09 and the most recent pandemic-driven economic downturn. No longer the ugly duck- ling, the strength of medical and life sciences real estate has made health care real estate more attrac- tive, and the asset class has caught the eye, captured the imagination and become the envy of the com- mercial real estate industry. Among those who have noticed are institutional investors and their advisers. The proven resilience and recession resistance of the health care real estate space has prompted more and more of them to seri- ously consider adding MOBs and other health-care-related properties to their portfolios by contributing capital for acquisitions, develop- ment or both. And, when they do, they frequently enter the market by partnering with experienced health care real estate firms. Those firms can quickly bring them up to speed about the unique benefits and char- acteristics of this high-demand asset class while leveraging their existing relationships within the health care real estate space. One example of this phenomenon is the recent collaboration between Chicago-based Nuveen, one of the five largest global real estate invest- ment managers, and my firm, Den- ver-based NexCore Group, a nation- al health care real estate developer. In that transaction, Nuveen entrusted NexCore to advise it on the acquisi- tion of a $620.4 million, 29-asset health care portfo- lio. In addition to serving as adviser and partner on the deals, NexCore also provides prop- erty management and leasing ser- vices. The Aug. 5 trans- action, which totals 1.17 million square feet, spans 13 states and includes $463 million in MOBs and $157 million in life sciences facili- ties, is the biggest health care real estate deal to date in 2021. It also represents the latest transaction between our two firms to fund and own development and acquisitions in health care and life sciences. We have partnered since November 2020 on more than $687 million in acquisitions, including 34 buildings comprising 1.4 million sf, as well as two additional buildings in devel- opment, which will add another 200,000 sf. “In this instance, the combina- tion of institutional capital and market-specific expertise results in a win-win scenario,” said Andrew Pyke, Nuveen’s head of health care. “The continued collaboration with a trusted strategic partner helps us to attain our goal to rapidly expand our health care footprint through developments, acquisitions, financ- ings and sale-leasebacks from qual- ity health care providers.” The new assets in the portfolio acquisition include a diversified group of traditional MOBs, urgent care centers, outpatient surgeries and specialty treatment centers, and specialty hospitals. In addition, Colorado is seen as an emerging life sciences hub. Prior to this most recent portfolio acquisi- tion, we partnered with Nuveen to in January to acquire the Boulder headquarters building of the public- ly traded blood-protein test maker SomaLogic Inc. (Nasdaq: SLGC). The two-story, 30,887-square-foot office/ flex life sciences building at 2945 Wilderness Place includes office and lab space and is 100% leased to SomaLogic. As more attention is drawn to the health care and life sciences real estate asset classes, you can expect to see more strategic partnerships and acquisitions. After all, it only makes sense that combining the individual strengths possessed by each partner and joining in a symbiotic way will result in great outcomes, where investors grow in positive ways and developers get to do what they do best – but more of it. It’s truly a healthy solution for all. s todd.varney@nexcoregroup.com MOB investor demand creates opportunities Todd Varney Chief development officer and managing partner, NexCore Group Colorado is seen as an emerging life sciences hub. NexCore partnered with Nuveen in January to acquire the Boulder headquarters building of the publicly traded blood- protein test maker SomaLogic Inc. The two-story, 30,887-square-foot office/flex life sciences building at 2945 Wilderness Place includes office and lab space and is 100% leased to SomaLogic.