Catholic Health Initiatives has agreed to sell 52 medical office buildings for $725 million to a Milwaukee-based real estate investment trust, the companies announced Tuesday.
Physicians Realty Trust said financing would come from an unsecured line of credit, a $400 million bridge loan from KeyBank and proceeds from an announced secondary offering of 18 million common shares of the company's stock.
The medical office buildings, located across 10 states, support Catholic Health Initiatives hospitals and satellites. The Englewood, Colo.-based system is the nation's fifth-largest not-for-profit hospital system.
The buildings are nearly 95% leased with the average lease term remaining of 8.6 years, Physicians Realty Trust said. Under the deal, new 10-year leases with CHI health systems are expected to generate $40.6 million, or 93%, of the first year's net operating income from the acquisitions.
Physicians Realty Trust also completed the purchase of several other medical buildings in March for a total cost of $96.7 million, the company said. The acquisitions include a medical building in Glendale, Ariz., associated with HonorHealth; one in Cornwall, N.Y., associated with Columbia Memorial Hospital; and three buildings in Birmingham, Ala., on the campus of St. Vincent's Birmingham.