NEW YORK-There’s no doubt that 2012 year was a big one for New York-based American Realty Capital Healthcare Trust, a non-traded real estate investment trust. In fact, 2012 saw ARC Healthcare Trust both raise and then spend more than $500 million on medical office buildings, seniors housing properties and post-acute facilities.
Yet, according to the REIT’s officers, 2013 could be – no, should be – even bigger. Here’s what the company said in a recent news release: “During 2013 we expect to raise and deploy more than $1 billion of new capital and remain one of the nation’s top investors in high-quality, income-producing healthcare real estate. Our experienced team is relationship-driven and we look forward to working with you and your clients during this dynamic time for healthcare investing.”
Dynamic time indeed. Many observers, however, would call it a difficult time to acquire healthcare real estate, as investor demand seems to be exceeding the number of properties available. Because demand is so high, MOBs with strong hospital sponsorship are selling for cap rates hovering around, and even less than, 7% according to many industry veterans.
Like all REITs, however, ARC Healthcare Trust must invest at least 75% of its assets in real estate. As its officers stated in the news release, the REIT expects to raise about $1 billion in 2013, meaning it will continue to aggressively find and acquire healthcare properties.
ARC Healthcare Trust acquires facilities on an all-cash basis, deploying capital it derives from investors who buy shares for $10 each through a network of broker-dealers nationwide. The REIT began selling shares as part of its initial public offering in early 2011; it broke escrow in May of that year by raising in excess of $2 million. So far, it has accumulated a portfolio exceeding $675 million in value, based on purchase price.
John Mugford is the Editor of Healthcare Real Estate Insights™, the nation’s first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.