by Curahealth Rehabilitation Holdco LLC in July 2019 to form Curahealth Hospitals and Cobalt Rehabilitation, is a regionally focused and expanding operator of IRFs and long-term acute care hospitals. Operations of the Fargo IRF were transferred to Post Acute Medical (“PAM”), which operates 18 IRFs across the United States, in October.

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Each property in the Portfolio features distinct competitive advantages to other post-acute and rehabilitation providers within the primary market areas. The El Paso IRF is located across the street from The Hospitals of Providence’s Sierra Campus (284 beds) as well as more than 630,000 square feet of multispecialty medical office buildings. The Fargo IRF is located within two miles of Essentia Health (133 beds), and The Sanford Medical Center (481 beds). Cobalt Rehabilitation of Louisville is located less than four miles from Norton Healthcare’s Clark Memorial Hospital (241 beds) and is the only freestanding IRF within a 10-mile radius, which enables the IRF to generate patient volumes from Louisville, Ky.

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H2C conducted an expedited-yet-thorough marketing process for the Portfolio that resulted in multiple offers from investors, ranging from 1031 buyers to net-lease investors, publicly traded REITs, first-time IRF investors, and established healthcare real estate private equity firms. The Portfolio was sold in two transactions to separate buyers and closed within 130 days of H2C being retained, demonstrating a highly efficient marketing process. 

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Notably, the closing marked H2C’s fifth medical office portfolio transaction of 2020 and H2C’s fifth transaction in the IRF space over the past 24 months.

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“H2C’s expertise in the IRF space provided us the certainty that investors would understand the operations of the IRFs and prospects for long-term profitability at each facility,” said Larry Vaile, Principal/Director of the Healthcare Group at Hicks Ventures. “The selection of two buyers that closed before the end of the year allowed us to achieve our targeted exit timeline and maximize the value of the Portfolio.”

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“The healthcare real estate experts at Hicks developed three exceptional IRFs for top operators,” said PJ Camp, Managing Director at H2C. “By telling a compelling story about the ramp-up in operations and profitability in these highly efficient facilities, and by directly marketing to investors whom we knew could perform, we were able to close this transaction in record time at above-market pricing.”  Email PJ.

 “The combination of low supply and high demand in the healthcare real estate space led to a competitive process as investors seek yield that can attained by acquiring IRFs. We had interest from several groups looking to enter into the space for the first time because of this, and we believe that the macro tailwinds will continue to drive profitability in the IRF space and command strong investor interest,” said Matthew Tarpley, Vice President, H2C. Email Matthew.