kind in 2014 and the conclusion of the monetization process initially announced in October 2014.
This second phase consisted of the $42 million sale of two properties located on the campus of Community General Osteopathic Hospital, a 200-bed acute care hospital located in a suburb of Harrisburg. The Bloom Medical Office Building is a fully-leased 72,950 square foot medical office building that houses an ambulatory surgery center operated by a joint venture between Pinnacle and physicians, as well as space leased by Pinnacle and physician tenants. The Medical Sciences Pavilion is a newly-built 65,660 square foot, Class A cancer center and outpatient care facility that is fully leased by Pinnacle for a 12-year term. The state-of-the-art facility connects directly to the acute care hospital facility on the campus.
“The team at H2C was technically very strong with respect to these unique transactions...”
William H. Pugh, CFO, Pinnacle
“The favorable pricing obtained in the Pinnacle transaction is a reflection of the market’s strong demand for institutional-quality real estate assets sponsored by a premiere healthcare system such as Pinnacle,” said P.J. Camp, Principal of H2C. “Given these and other attributes, the market-leading result was driven by a highly competitive bidding process for this portfolio.”
In the first phase of the Pinnacle portfolio monetization process led by H2C, five medical office buildings (“MOBs”) and one hospital with a combined total of 645,225 square feet were sold for $132 million. In addition, H2C advised on the sale of an off-campus clinic facility for approximately $1 million earlier in 2014 to a local physician group practice, bringing the total size of the portfolio monetization to $175 million. The transaction represents one of the largest monetizations by a health system in recent years, and with a capitalization rate below 6% for the MOBs, one of the most aggressively priced deals of its kind in 2014.
“The team at H2C was technically very strong with respect to these unique transactions,” said William H. Pugh, CFO of Pinnacle. “They listened to our needs and were very responsive in answering questions and resolving issues. We are very pleased with the results."
H2C Closes Industry's Largest Health System Real Estate Monetization in 2014
posted on January 29, 2015
NEW YORK—Hammond Hanlon Camp LLC (“H2C”), through its wholly-owned subsidiary H2C Securities Inc., served as the exclusive financial advisor to PinnacleHealth System (“Pinnacle”) in the successful completion of the second and final phase of its $175 million healthcare real estate portfolio sale to a public, nontraded healthcare REIT. The transaction was the larget of its
PinnacleHealth (“Pinnacle”) is one of the largest not-for-profit health systems in the mid-Atlantic region, providing a total of over 700 licensed beds across four hospital campuses offering a broad range of services. Pinnacle employs over 5,000 full-time employees with over 1,300 physicians, making it one of the largest employers in its region. Supported by a strong liquidity position, Pinnacle maintains an investment-grade credit rating of A3/A by Moody’s and Standard & Poor’s, respectively.
PinnacleHealth is a pioneer not-for-profit healthcare system dedicated to providing and improving the health and quality of life for the people of central Pennsylvania since 1873. A proven leader in medical innovation, PinnacleHealth offers a wide range of services from primary care to the most complex surgeries and Magnet® recognition for nursing excellence. The healthcare network includes three campuses (Community, Harrisburg and West Shore) and medical services including family practice, imaging, outpatient surgery, and oncology, at multiple locations throughout the region.
ABOUT AMERICAN REALTY CAPITAL HEALTHCARE TRUST II, INC.
American Realty Capital Healthcare Trust II, Inc. is a non-listed real estate investment trust which acquires a diversified portfolio of real estate properties. The company focuses primarily on healthcare-related assets including medical office buildings, seniors housing and other healthcare-related facilities throughout the United States. ARC is based in New York, NY.
ABOUT HAMMOND HANLON CAMP LLC
Hammond Hanlon Camp LLC (“H2C”) is an independent strategic advisory and investment banking firm committed to providing superior advice as a trusted advisor to healthcare organizations throughout the United States. H2C’s professionals have a long track record of success in healthcare mergers & acquisitions, capital markets, real estate and restructuring transactions, acting as lead advisors on hundreds of transactions representing billions of dollars in value. Hammond Hanlon Camp LLC offers securities through its wholly-owned subsidiary H2C Securities Inc., member FINRA/SIPC. For more information, go to h2c.com
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