The firm’s new Caddis Acquisition Fund flourished with investments in 20 medical office buildings totaling 893,528 square feet
During only the first 12 months since establishing its new investment fund, Caddis® has emerged as one of the nation’s most active acquirers of medical office buildings (MOBs), company officials say.
Through the fund, the Dallas-based national healthcare real estate firm acquired 20 fixed-income core MOB assets totaling 893,528 million square feet across the country. Caddis Acquisition Fund I was launched last November.
“We had ambitious goals for the first year of the investment fund, but we’ve surpassed even our own expectations,” Caddis
CEO Jason L. Signor notes. “The 20 properties we acquired establish Caddis as one of the most active acquirers of medical office buildings nationwide.”
He adds, “These properties have a number of strong characteristics that benefit our fund investors. More than 48 percent of the total tenancy is represented by affiliated hospitals, health systems and investment grade tenants. In addition, the portfolio is 87 percent occupied with 7.7 years of weighted average lease term remaining.
“The bottom line: These are high quality properties with strong tenancy in growing areas of the country.”
Mr. Signor says that the acquired properties are in seven states: Florida, Georgia, Maryland, New York, Pennsylvania, South Carolina and Texas.
“The fund is still open for another 12 months,” adds Lance M. Hardenburg, Caddis Executive Vice President Transactions and Partner. “We expect the fund will have a similar strong performance next year.”
He explains, “We project that the 2019 net operating income will be $15.7 million based on the 20-asset portfolio without considering any new acquisitions. The annualized dividend yield to our fund investors has been paid out at a rate of 5 percent to date and is currently expected to increase to 5.25 percent.”
Mr. Hardenburg also notes that Caddis recently negotiated and closed a modification of an existing loan with Capital One, North America, as lender to eight of the fund’s assets. The modified loan includes a total line of $75 million with potential increased capacity, so that more assets can be added in the future.
Mr. Signor emphasizes that Caddis officials will build on the fund’s first-year success by continuing to pursue the same proven investment strategy.
“As we continue to grow the fund’s portfolio with a focus on adding core to core plus assets, we expect to improve the value to our investors by reducing the cost of debt, growing tenant relationships and selecting high-quality properties to purchase,” he says.