NEW YORK — Sept. 15, 2020 — Hammond Hanlon Camp LLC (“H2C”), a healthcare-focused investment banking firm, served as the exclusive financial advisor to Tower Health (“Tower” or “the System”) on the monetization of a 23-asset medical office and healthcare real estate portfolio.

 

The portfolio, located in Southeast Pennsylvania, totals 651,677 square feet and transacted for $203.7 million.

 

After completing a comprehensive refinancing of its bonds in February 2020 with H2C as financial advisor, Tower sought to improve overall liquidity and strengthen its credit rating by closing the transaction before the end of its fiscal year—less than six months after engagement. “Unlocking the equity trapped in Tower’s illiquid assets is a crucial part of an integrated strategic plan that our firm has been developing with Tower,” says Michael Hammond, Principal, H2C.

 

The tight timeline was further complicated by the coronavirus outbreak, which caused real estate investment trusts (“REITs”) and debt capital markets in the medical office sector to seize up. Despite those challenges, H2C launched an aggressive marketing campaign to a targeted list of investors with the capacity to fund a transaction of this size and the capability to close less than four months from initial contact. Because of the need for an expedited process, H2C advised Tower to proactively engage third-party consultants related to environmental, property condition, title, survey, and zoning as well as develop key legal documents that were instrumental in facilitating an on-time closing.

 

The marketing campaign generated a number of competitive letters of intent. H2C then modeled a detailed transaction impact analysis of each offer to the System’s financials that identified the optimal balance between lease term and rent payments for each property. Ultimately, the portfolio was awarded to a real estate private equity firm that could close in all cash, with aggressive timing on due diligence and closing periods.

 

“The structure of this transaction enabled Tower to retain strategic control over key assets in our healthcare real estate portfolio while obtaining optimal sale terms,” says Clint Matthews, CEO, Tower Health. “H2C accomplished execution of the transaction that closed within 100 days of marketing, overcoming some extraordinary challenges, especially given the global pandemic.”

 

“This transaction demonstrates the continued strong interest in healthcare real estate investment during the COVID-19 pandemic,” says PJ Camp, Principal, H2C. “We’re pleased to have supported Tower Health in monetizing its healthcare real estate portfolio with highly competitive pricing, an expedited closing, and formation of a long-term relationship with a top-tier investor.” Email PJ.