Healthcare Realty Invests $400M to Expand Nuveen JV

Healthcare Realty Trust Inc. is expanding its existing joint venture relationship with Nuveen Real Estate (previously referred to as TIAA) to the tune of about $400 million in assets.

HRT will contribute the assets to a new joint venture in two phases at a cap rate of about 6.6 percent. The first phase, which should be completed in August, will see the contribution of eight current HRT properties valued at $193 million. Nuveen will fund a contribution equal to 80 percent of that equity value. HRT will retain the remaining 20 percent equity and will continue to manage day-to-day operations and leasing of the properties.  

The joint venture is expected to use secured financing of about 40 percent of the contributed value. Closings are subject to satisfaction of customary closing and financing conditions.  

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Concurrently, HRT announced that it has generated about $400 million of proceeds from joint venture and asset sales so far this year. Additional asset sale and joint venture transactions now under contract or LOI are expected to increase those proceeds to more than $1 billion.

The majority of these transactions are expected to close in the third quarter.

In addition, KKR has committed up to a further $600 million of capital to increase the potential value of its 80/20 JV with HRT beyond the initial property contributions. HRT reported that in the near term, additional property contributions are expected to generate incremental proceeds for it of about $100 million in August, increasing the value of the joint venture to about $500 million.

Wide horizons

Healthcare Realty owns and operates medical outpatient buildings, primarily near market-leading hospital campuses. Its portfolio includes nearly 700 properties totaling more than 40 million square feet concentrated in 15 growth markets.

In May, Nuveen acquired a two-building, 371,200-square-foot warehouse-distribution portfolio near Indianapolis. HSA Commercial Real Estate was the seller, represented by Colliers.

The assets are part of Gateway Business Park, a six-building industrial center developed by HSA. The park’s development timeline has been a long one; its first building was completed in 2004 and the recent one in 2022.

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