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Asset & Property Management
NexCore, RREEF Form $500 Million Joint Venture
Posted January 26, 2006
Partners are targeting medical properties, first deal is already done.
NexCore Group has teamed with San Francisco-based RREEF to create a joint venture that plans to recapitalize, develop and acquire $500 million in medical real estate during the next two to three years.
RREEF, a unit of Deutsche Bank, is one of North America’s largest private property owners, with $27.5 billion in assets under management. NexCore Group, an experienced medical real estate firm that manages a 1.4 million square foot portfolio nationwide, has projects underway in several states. The JV partners have already completed their first transaction: The $24.8 million recapitalizing of
Dry Creek Medical Campus
, an 11-acre ambulatory care center in Englewood, Colo., in the fast-growing Denver Tech Center area. The recapitalization through RREEF was completed Dec. 29.
“This is merely the first of what we anticipate will be an ongoing series of targeted medical real estate transactions we will undertake with RREEF,” says Peter Kloepfer, a Senior Managing Director with NexCore. “The fragmented, inefficient medical real estate market is consolidating. Through this joint venture with a stable, long-term capital partner, NexCore is solidifying its position as a national provider of medical real estate.”
“In the past, most medical real estate investors were forced to choose between partnering with standalone real estate firms with limited capital resources or well-capitalized investors that lacked medical property experience,” explains Dwight Merriman, a Partner with RREEF. “Through this strategic partnership, we can now deliver superior service and investor returns by combining NexCore’s sector-specific medical real estate development, financing, leasing and property management expertise with our substantial capital resources and asset management skills.”
“When we decided to team with a leading real estate investment advisor, RREEF was one of several potential candidates,” Mr. Kloepfer says. “But RREEF stood out because Dwight and his team had both the ability to grasp the nuances of the medical property market and the vision to recognize its tremendous long-term investment potential.”
“The boom in the U.S. healthcare industry has spurred our (RREEF’s) interest in healthcare real estate and partnering with NexCore should provide ample opportunities to develop profitable health-related real estate strategies,” adds Asieh Mansour, RREEF’s Director of Research. “The aging of the Baby Boomers increased chronic illness among the growing senior citizen population, and our increasing life expectancy suggests that we will be consuming more healthcare and consuming it for a longer period of time. A real estate strategy that takes advantage of these powerful demographic trends should be very successful.”
NexCore and RREEF plan to close on three more recapitalizations within the next month, Mr. Kloepfer says, and the partners are working on several potential acquisitions.
RREEF North America is a full-service real estate investment advisor. Since its formation in 1975, the firm’s assets under management have grown to $27.5 billion. RREEF North America offers a diverse menu of investment options including separate accounts, core and value-added private investment vehicles, and investments in publicly traded real estate securities.