MIAMI-United Trust Fund just funded two healthcare facilities. The deals include a 196,000-square-foot to-be-built orthopedic hospital in Springfield, MO and a 225,000-square-foot to-be-built medical office building in Edmond, OK.
Specifically, United Trust Fund infused the Springfield project with $111 million and the Edmond facility with $92 million. These two transactions were structured as a forward funding build-to-suit/sale-leaseback.
“We had completed sale leasebacks on many existing medical office buildings before,” Paul Domb, vice president of Asset Management at United Trust Fund, tells GlobeSt.com. They were motivated by several items, such as off balance sheet treatment. We had to meet a closing deadline of June 30 and fund construction.”
This unique and creative arrangement provided Sisters of Mercy construction financing at a very low cost with off-balance sheet treatment, along with a long-term, low-cost of leasing in accordance with their corporate objectives. Domb says the deals were attractive to United Trust Fund because they represented an opportunity to buy a long-term income stream from quality companies. United Trust Fund has been in the sale leaseback business for 40 years.
“We placed a significant amount of capital at predetermined rentals today on two major properties whereby the primary lease commences upon the completion of construction,” explains Domb. “This structure benefits United Trust Fund as we have allocated $200-plus million with a creditworthy tenant. I believe this to be a trend as interest rates will most certainly go higher and capital becomes more expensive.”
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.