NexCore Group Becomes Largest Medical Office Landlord in Colorado Springs
NexCore Group announced the acquisition of 285,000 square feet (SF) of medical office buildings from the City of Colorado Springs-owned Memorial Health System (MHS). The sale of the Briargate Medical Office Building (59,000 SF), located at 8890 North Union Boulevard, and the Printers Park Medical Office Building (223,000 SF), located at 175 South Union Boulevard, was approved by the Colorado Springs City Council yesterday afternoon. MHS will continue to lease space from NexCore Group as the largest tenant of the two buildings.
NexCore President and Chief Executive Officer Greg Venn says: “With a growing portfolio of medical office real estate, NexCore Group was able to offer Memorial Health System the most competitive capital structure, technical building operation expertise, and economies of scale. This monumental deal reinforces our commitment to providing valuable healthcare real estate solutions and to serving the state’s healthcare needs.”
MHS received the highest bid for the properties from the NexCore Group. The bid for the buildings was $66,000,000 and the bid for the additional land at Briargate was $3,400,000 totaling $69,400,000.
“Our process was performed to assure that the ultimate buyer, NexCore Group, not only presented the best financial offer but also had the experience and expertise to manage physician office space,” reported Richard Eitel, chief executive officer of Memorial Health Systems. “As the largest tenant occupying the Briargate and Printers Park Buildings, MHS will continue to have relationships with the physician tenants and we wanted to make sure the buyer had a track record of successfully dealing with physicians over time.”
NexCore Group currently owns and operates nearly 1.3 million square feet of healthcare-related real estate nationwide. The company supports a wide range of hospital, physician practices and medical-related businesses, including ambulatory surgery centers, urgent care, neurology/neurosurgery groups, laboratory, radiology/x-ray, internal medicine, pediatrics, cancer and cardiology centers, OB/GYN, orthopedics and sports medicine, occupational medicine, rehabilitation and elder care.
In awarding the sale to NexCore Group, MHS performed financial analysis with the assumption that MHS can reinvest the sales proceeds into medical services, effectively turning non-core assets into needed capital.
The MHS properties will be acquired within a strategic joint venture between NexCore and Ventas, Inc. (NYSE: VTR), one of the nation’s leading healthcare real estate investment trusts (REITs).
“Not only has NexCore Group become the largest medical office building landlord in Colorado Springs,” concludes Mr. Venn, “NexCore Group has become one of the leading healthcare real estate developers that hospitals and health care systems choose to own and operate their facilities nationwide.”
NexCore has added $120 million of assets to its healthcare real estate portfolio this year, for a total of seven medical office buildings acquired in 2007 to date, with a total of more than 580,000 gross s.f. in operation in the state of Colorado.