Global Medical Buys $64M MOB Portfolio in Ohio
- Apr 25, 2018
Global Medical REIT Inc. has purchased a medical office portfolio in Belpre, Ohio, for $64.2 million.
The tenancies on the portfolio are triple-net leases with a remaining occupancy term of roughly 11 years, each subject to three- to five-year renewal options. Marietta Memorial Hospital—a division of the Memorial Health System, a Fitch BB-rated health structure with approximately $450 million of net revenue in 2017—currently leases four assets. The current rent is $5 million and comprises the following:
- Building I: annual rent of $1.2 million; subject to $50,300 increases every five years, with the next increase due to go into effect in 2021
- Building II: annual rent of $0.6 million; subject to $25,000 increases every five years, with the next increase due to go into effect in 2018
- Building III: annual rent of $0.8 million; subject to $25,000 increases every five years, with the next increase slated for 2022
- Building IV: annual rent of $2.5 million; subject to 10 percent increases every five years, with the next increase scheduled for 2019
The initial cap rate for the property was approximately 7.9 percent.
“Memorial Health Systems the largest hospital system in the area. This acquisition fits squarely into our primary investment strategy of acquiring medical office buildings in secondary and tertiary markets with strong tenants,” said Jeffrey Busch, CEO of Global Medical REIT Inc., in a prepared statement. “Additionally, the acquisition of the Belpre portfolio brings our overall gross portfolio size to approximately $600 million.”
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