Welltower Closes on $1.3B Medical Office Portfolio from CNL

NEW YORK CITY—CNL Healthcare Properties sold a medical office portfolio of 55 buildings to Welltower Inc. for $1.25 billion. The portfolio comprises approximately 3.3 million square feet across 16 states positioned in strategic locations within major metropolitan markets. The facilities are affiliated with premier health systems including Novant, Memorial Hermann and Cleveland Clinic.  The deal was first announced in January 2019.

HFF Securities, L.P. and Holliday Fenoglio Fowler, L.P. advised CNL, a real estate investment trust that focuses on investing in seniors housing and healthcare. In 2018, HFF Securities was engaged as a strategic financial advisor to explore and execute potential liquidity alternatives for the REIT.

The HFFS team was led by Steve Hentschel and Ted Flagg as well as members of HFF’s national medical office capital markets team including Evan Kovac, Ben Appel, Andrew Milne, Zach Drozda and Anthony Frogameni.

“This is the second largest medical office portfolio sale to ever transact based on total dollar volume,” says Milne. “The high quality portfolio primarily consists of properties positioned in major markets and on campuses of leading US healthcare systems.”

Welltower is an S&P 500 corporation and REIT that also invests in senior housing operators, post-acute providers and health systems. Last year it was active in the New York market in this sector. In January 2018, with the real estate investment firm Hines it closed on a limited partnership interest with a confidential institutional investment to construct Sunrise at East 56th St., an assisted living and memory care facility in Midtown.

In November 2018, again with Hines, Welltower closed on a $61 million purchase of a development at 2330 Broadway. The joint venture planned to demolish the existing commercial structures and to build a 140,000 square-foot, 17-story senior living facility at the Upper West Side location.