BOSTON–MLL Capital, a Boston-based commercial real estate investor focused on medical office, laboratory and life sciences properties across the US, announced that it has acquired a portfolio of on campus medical office buildings in San Antonio, TX. The portfolio is comprised of four buildings, totaling 423,411 square feet. Terms of the deal were not disclosed.
“Healthcare real estate is a counter cyclical investment opportunity, offering some of the best risk-adjusted returns at this point in the economic cycle,” said Kyle O’Connor, President and Founder, MLL Capital. “This acquisition is representative of our strategy of focusing on opportunistic and value-add investments in this sector, and repositioning them to attract and retain high quality tenants.”
The four well-located properties within San Antonio and the South Texas medical community are each directly connected to a hospital owned by a health system which delivers world-class healthcare.
Two of the buildings are located on the newly-renovated campus of Children’s Hospital of San Antonio, a world-class, freestanding hospital dedicated 100% to the care of children, owned by Christus Healthcare. The campus is anchored by a broad integrated network of community-based services and partners, and is affiliated with the Baylor College of Medicine and Texas Children’s Hospital. The other two are located on the Christus Santa Rosa Hospital Medical Center campus, located within the 900-acre South Texas Medical Center, an expansive medical destination that consists of 45 related institutions, including 12 hospitals. It is the largest medical research, education and healthcare provider in the region.
MLL Capital plans to invest approximately $27 million into renovating and leasing the portfolio with the goal of creating a high-quality medical office environment capable of supporting the clinical needs of world class medical professionals and serving the area’s growing patient population and strong demand for outpatient services.
“While many investors are still targeting core properties, we believe that acquiring value-add properties in the medical office sector and repositioning them offers a strong alternative allocation to achieve stabilized yields, presenting a great investment opportunity,” O’Connor said.
MLL Capital partnered with Akerman, a full-service commercial real estate firm based in Atlanta, GA, to form a joint venture with Artemis Real Estate Partners, a multi-strategy real estate investor, to purchase the portfolio. MLL Capital will serve as the asset manager to execute the business plan for the investment. Ackerman & Co. will serve as property manager and construction manager.
MLL Capital pursues opportunistic and value add real estate investments in the medical office and life sciences sector that create value through strategic capital investment, detailed repositioning and redevelopment plans with a strong focus on targeted leasing. O’Connor is an industry veteran with 25 years of commercial real estate investment and asset management experience across a broad range of property types, markets and risk strategies for investments totaling nearly $4 billion.
Ackerman & Co. is a privately held, full-service commercial real estate firm focused on providing quality investment, brokerage, management and development services in the Southeast. The company, founded in 1967, retains an expert team of more than 100 real estate professionals. To date, Ackerman & Co. has developed and acquired nearly 35 million square feet of office, medical, industrial, retail and mixed-use space, has more than 7 million square feet under management, and maintains an investment portfolio valued at $1 billion.
Artemis Real Estate Partners invests with best-in-class local operating partners, both established and emerging, in multifamily, office, industrial, retail, hotel, medical office and senior housing across opportunistic, value added and enhanced core strategies. Artemis has raised over $2.5 billion of investor capital across two commingled value-add/opportunistic fund vehicles, one commingled core plus healthcare real estate fund, and a series of emerging manager separate accounts with The New York State Common Retirement Fund, New York City Retirement Systems and the Illinois Municipal Retirement Fund. The firm is headquartered in the Washington DC metropolitan area with offices in New York, Los Angeles, and Atlanta. Artemis’ sole focus is U.S. commercial real estate.