Anchor Health Properties Significantly Expands its Huntsville MSA Presence Through the Acquisition of a Large Off Market Portfolio of On Campus Medical Office Buildings

Anchor Health Properties has recently invested in a 207,000 square foot portfolio of three Class A, recently constructed, on-campus medical office buildings located in the broader Huntsville, Alabama metropolitan area. The acquisition was made via a joint venture with an affiliate of the Carlyle Group. This represents Anchor’s second large investment in the Huntsville MSA in recent years, having previously worked on the acquisition of the Clearview Cancer Institute in downtown Huntsville which it continues to manage on behalf of a public REIT.      

All three facilities are located on Huntsville Hospital Healthcare System (HHHS) sponsored hospital campuses which collectively feature more than 900 hospital beds across the respective inpatient facilities. Strategically situated directly on the main accessway to each hospital, the portfolio assets (1041 Balch Road, Madison, AL; 720 Gallatin Street SW, Huntsville, AL; 101 Fitness Way, Athens, AL) provide high visibility and strategic positioning for outpatient services.  All three buildings were developed locally by Huntsville based Triad Properties and featured significant ownership by Huntsville Hospital Health System to date. 

Anchor’s Chief Executive Officer Ben Ochs stated, “We admire Huntsville Hospital Health System’s dedication to providing the highest standard of care to the communities they serve, and we are pleased to work closely with them to help elevate the levels of care available to the surrounding community. These institutional quality, Class A assets represent the key attributes we look for — prime location with a dominant regional health system as key tenant and a long-term commitment to the buildings. We are proud to add these properties to our growing portfolio of premier healthcare real estate, and greatly expand our operating presence in the Huntsville MSA.”

As the third largest not for profit health system in the country, Huntsville Hospital Health System serves as a key anchor tenant of the portfolio offering strategic outpatient services that include imaging, ambulatory surgery, cardiology, internal medicine, physical therapy, and laboratory services. The laboratory space built out in the Twickenham building services the entire campus via a system of pneumatic tubes and is the largest hospital-owned lab in the US. Additional primary and specialty care services bolster a diverse and synergistic clinical medical ecosystem, including regional physician groups offering women’s services, internal medicine, optometry, oral surgery, sleep medicine, and rheumatology.

Spurring the strategic investment in the Huntsville MOB portfolio is the commitment to major economic development projects from high growth industries such as defense, auto manufacturing, and internet cloud computing companies. Featuring one of the fastest growing economies in the United States, more than $4 billion of growth projects are currently slated for the Huntsville MSA, including new facilities for the likes of Google, Mazda, LG Electronics, Facebook, and GE Aviation resulting in more than 6,000 new jobs being created in the coming months. Additionally, there are more PhDs per capita in the Huntsville MSA than any other city in the United States.   

“We are thrilled to be a part of HHHS’ continued expansion in the Huntsville, AL metropolitan area,” said James Schmid, Chief Investment Officer with Anchor. “There is a lot of development activity in the surrounding communities to accommodate the growing demographic base and we are looking forward to serving as a contributing resource to the residents of Limestone and Madison Counties. Huntsville’s economic growth trajectory resembles that of other similar sized and rapidly expanding Southern US markets such as Raleigh, Nashville, Charlotte, and Greenville - all of which are key target markets for Anchor. We are very excited about this investment, which represents our twelfth acquisition so far this year. We have very ambitious goals for 2019 and are already exceeding our own expectations. Strategic off market portfolio investments of best in class regional assets such as these allow us to build instant scale in growth markets.”

Noted Triad Properties’ Principals William Stroud and Gerry Shannon, “We thoroughly enjoyed working with the Anchor Health Properties team as this transaction required a great deal of cooperation between our firms. We were impressed by the depth of the team’s healthcare expertise and corporate strength allowing an accelerated closing schedule on a complex transaction.” 

Newmark Knight Frank Executive Managing Director Matt Tritschler added, “The Anchor Health Properties’ team exceeded our expectations throughout each step of the transaction. Their collaborative, hands-on approach coupled with their proven ability to effectively execute was apparent from due diligence to direct involvement with property tours and tenant interviews. We are looking forward to working together again soon.”

Anchor Health Properties will provide go forward property management services at each facility in partnership with Triad Properties. Capital One provided debt financing on this transaction and Matt Tritschler of Newmark Knight Frank’s Atlanta office provided sales advisory services to Triad Properties.