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LONG BEACH, CA-HCP Inc., a healthcare and medical office REIT with a portfolio of 706 properties across the US, has placed $319 million in secured debt on 16 of its senior housing assets, with Fannie Mae buying the debt. The company—which owns 267 seniors housing assets—says that the $319 million in financing includes $140 million of five-year secured debt on four of its senior housing properties and $179 million of eight-year secured debt on 12 seniors housing holdings. The assets are cross-collateralized and the debt caries a weighted average interest rate of 6.39%.

The HCP transaction is notable not only for its size but for its placement during such troubled times in the credit markets. Despite the downturn in many segments of the commercial real estate markets, industry experts consider seniors housing, healthcare and medical office holdings like those of HCP to be among the best-positioned to weather the economic and financing turmoil that grips the industry today.

A recent report on the medical office industry by Boston-based Torto Wheaton Research, for example, says that investors see medical offices as a beacon of hope, or at least stability, in an uncertain economic climate and a time of rising office vacancies. The report by Torto Wheaton cites a change of attitude on the part of investors, many of whom formerly favored general office space but now see medical office and healthcare properties as a safer bet than general office space, especially since office markets throughout the US are weakening. As GlobeSt.com reported on Monday of this week, for example, the once-soaring Orange County office market continues to struggle from the effects of the mortgage industry mess and the general economic slump.

The Torto Wheaton report outlined why the medical office segment stands out against general office demand: "Baby boomers represent 26% of the US population and, now hitting 60, will place tremendous demands on Medicare and require a good deal of support from professional caregivers. In addition to aging baby boomers, the fundamental change in the way healthcare is delivered is the other demand drive

Instant Insights /

HCP Places $319M of Seniors Housing Financing

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