Quilvest, the investment business of Argentina’s famous Benberg brewing family, has inked a programmatic joint venture with Los Angeles-based Stockdale Capital to invest up to $100 million in US medical office space, the firm said last week.
Through the JV, which has an initial equity investment of $50 million from Quilvest, the two parties will be acquiring hospital-anchored medical offices in the western US and targeting a high-teens gross return, Stockdale’s managing director Dan Michaels said.
Last week, the duo closed on its first acquisition, Portland, Oregon’s Gresham Station Medical Plaza, for an undisclosed price. The 100,000 square foot building, located at 831 NW Council Drive, was 90 percent leased.
“This joint venture underpins Quilvest’s focus on healthcare real estate – a sector that is uniquely positioned to benefit from favorable demographic trends, an evolving regulatory environment, and a growing deficit of supply suitable for current needs,” Barry Hammerman, a partner at Quilvest, said in a statement last week.
Stockdale has invested about $400 million in the property type through other ventures, working with institutional investors including private equity firm Siguler Guff, Michaels said.
“It’s probably the most interesting risk-reward in US real estate today because you have this retail-ization of hospitals pushing their services off-campus,” Michaels said. In other property types, “you very rarely find large, recession-resistant, long-term tenants that are willing to put capital into improvements.”
Michaels noted that undersupply, largely because of zoning restrictions that are more onerous for medical office than traditional office, has pushed vacancies into the single digits in many areas. He added that hospitals are considered more creditworthy than other tenants.
This is Stockdale’s fourth programmatic JV, Michaels said. In September, the firm teamed up with London-based Grosvenor Group to invest up to $100 million in parking garages in the southwest US, PERE previously reported. The firm also has a $75 million partnership with Siguler Guff to invest in value-add property across the southwest US, and a $100 million venture with an unnamed institutional investor to buy core-plus medical office buildings in Los Angeles.
Quilvest has over $36 billion in assets, according to Wednesday’s statement. Stockdale manages about $500 million, Michaels said.