This transaction marks the second U.S. debt deal with Nuveen Real Estate, following Allianz’s USD 94m financing of a six property industrial portfolio for the investment manager’s U.S. Cities Industrial Fund (“USCIF”) in 2020.
This transaction is significant for several reasons, not least for the unique nature of the loan and the size of the portfolio. The deal is structured on a 7-year term with both a fixed rate tranche for USD 163.8m (70%), a floating rate tranche for USD 70.2m (30%) and is the first of its kind provided by Allianz Real Estate in the U.S. and Europe. The loan will provide 51% of the total acquisition price of USD 462.9m, and the Sponsorship will have USD 228.9m of equity remaining in the transaction.
Totaling over 747,000 rentable sq ft, the portfolio represents 27 high-quality class A/B medical office properties geographically diversified across 13 states: Arizona, California, Florida, Illinois, Michigan, North Carolina, New Jersey, New York, Pennsylvania, Texas and Wisconsin. 20 of the 27 properties are located in CON states, in which local governments requires an extensive approval process to prove that there is a need for the development of new healthcare facilities in each location, providing high barriers to entry and regulatory restrictions around new supply.
The portfolio is 99% occupied by 38 tenants, of which 92% are investment grade credit healthcare systems. The portfolio rent roll benefits from a weighted average unexpired lease term (WALT) of 12 years, providing for a reasonable lease rollover profile (33% of portfolio NRA) during the loan term. The portfolio is well-diversified across traditional medical offices, urgent care centers, outpatient surgeries & specialty treatment centers, and specialty hospitals.
Mike Cale, Co-head of U.S. Debt, Allianz Real Estate, United States said: “This is a complex and innovative transaction that underlines our willingness to take a flexible approach to meeting the requirements of one of our longstanding, global partners.”
“Covid-19 has highlighted the need for improved efficiency and ease of access to healthcare, increasing demand for outpatient centers and higher-severity care space within hospitals. Medical offices thus represent a unique, resilient asset class poised to further benefit from strong fiscal tailwinds engendered by both the CARES Act and the U.S. small business stimulus program.”
“We are delighted to have completed this latest transaction ,” said Christoph Donner, CEO, Allianz Real Estate of America. “Despite the volatility seen over the last 12 months, Allianz Real Estate has substantially expanded its U.S. portfolio, reaching a record USD 21.6bn AUM at the end of 2020, spanning equity and debt. We look forward to building on our commitment to the region.”
When introducing a property investment opportunity to PIMCO Prime Real Estate you acknowledge that we are under no obligation to accept your introduction or enter into any agreement with you. Fees, commission or other payments in respect of introductions shall only be payable where there is a signed written agreement to that effect entered into between PIMCO Prime Real Estate and the introducer. By submitting an introduction to PIMCO Prime Real Estate you shall be deemed to have accepted the aforementioned terms.
"PIMCO Prime Real Estate” is a PIMCO company that includes PIMCO Prime Real Estate GmbH, PIMCO Prime Real Estate LLC, and their subsidiaries and affiliates: PIMCO Prime Real Estate GmbH (Company No. 158768, Seidlstrasse 24–24a, 80335 Munich, Germany), PIMCO Prime Real Estate GmbH Belgium Branch (VAT No. BE 0841.512.711, Boulevard Roi Albert II, 32, 1000 Brussels, Belgium), PIMCO Prime Real Estate GmbH France Branch (SIRET No. 509 339 669 00053, 50-52 Boulevard Haussmann, 75009 Paris, France), PIMCO Prime Real Estate GmbH Italy Branch (Numero REA MI-2107576, Piazza Tre Torri, 3 20145 Milano, Italy), PIMCO Prime Real Estate GmbH Spain Branch (NIF W2760686B, Paseo de La Castellana, 200 Edificio Spaces, 28046 Madrid, Spain), PIMCO Prime Real Estate GmbH Sweden Branch (VAT No. SE516411865401, Norrlandsgatan 18, 111 43 Stockholm, Sweden), PIMCO Prime Real Estate GmbH UK Branch (Company No. FC036236, 11 Baker Street, London W1U 3AH, United Kingdom), PIMCO Prime Real Estate Asia Pacific Pte Ltd (UEN 202000233H, 12 Marina View #17-02 Asia Square Tower 2, Singapore 018961), PIMCO Prime Real Estate (Shanghai) Co, Ltd (Company No. 91310115MA1K4KBT0L, 479 Lujiazui Ring Road, Shanghai Tower, Pudong New District , Shanghai 200120, People’s Republic of China), PIMCO Prime Real Estate Japan GK (Company No. 0104-03-022895, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan), PIMCO Prime Real Estate LLC (File No. 5234055, 1633 Broadway, New York, NY 10019-6999, USA). PIMCO Prime Real Estate LLC is a wholly-owned subsidiary of Pacific Investment Management Company LLC, and PIMCO Prime Real Estate GmbH and its affiliates are wholly-owned by PIMCO Europe GmbH. PIMCO Prime Real Estate GmbH operates separately from PIMCO. PIMCO Prime Real Estate LLC investment professionals provide investment management and other services as dual personnel through Pacific Investment Management Company LLC.
PIMCO Prime Real Estate is a trademark of PIMCO LLC and PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world.