GlobeSt.com UPDATE: CNL Retirement Closes $207M Deal With Dasco

The deal solidifies CNL Retirement's position as one of the largest owners/operators of seniors housing and medical office facilities in the US, local brokers monitoring the industry tell GlobeSt.com.

CNL has also agreed to purchase interests in six additional Dasco-owned medical office buildings for an undetermined price.

Tied in with the properties' acquisition is CNL's purchase of a 55% interest in Dasco, a 15-year-old full-service medical real estate development and acquisition firm that has developed 2.5 million sf of healthcare facility space and acquired 850,000 sf of medical office buildings and outpatients facilities.

The Dasco properties acquired by CNL are in Arizona, California, Colorado, Florida, Georgia, Illinois, Kentucky, Mississippi and Texas. Dasco will continue to provide development, leasing and management services for the properties. The purchase price equates to $158.84 per sf and an average price of approximately $7.9 million per property.

When the deal was first reported in July, CNL had tentatively agreed to buy 28 properties in the nine states for $232 million or $165.71 per sf. The average price per property was nearly $8.3 million. The acquisition gives CNL Retirement 947 medical office building tenants. The REIT has 16,035 seniors housing units.

"The Dasco portfolio perfectly aligns with our business strategy of investing in quality healthcare facilities," Stuart J. Beebe, executive vice president and chief financial officer of CNL Retirement, says in a prepared statement. "This proves to be another tremendous opportunity, allowing CNL to capitalize on the relationships and reputation that Dasco has built over its 15-year history in medical real estate."

In the same statement, Dasco CEO Malcolm Sina echoes Beebe's assessment of the deal. "This partnership with CNL Retirement Properties is the perfect business relationship for our company clients," Sina says. "We share the same core values and appreciation for the long term, whether it is in building relationships or owning properties."

In partnering with Dasco, CNL gains access to the contacts and relationships Dasco chairman Jim Heistand built up in his 25-year real estate career. In 1997, for example, locally based Heistand sold 6.5 million sf of office space to Raleigh, NC-based Highwoods Properties Inc. for $622 million, the largest commercial real estate deal of its kind in Central Florida at that time.

In 1999, Heistand, Lehman Brothers of New York, Sina and Dasco president Jim Galgano acquired the then 10-year-old Dasco operating company and began growing the firm into a national player. Dasco has a staff of 60 with regional offices in Orlando, Chicago, Dallas, Los Angeles, Scottsdale, AZ and Jackson, MS.