Canadian REIT Breaks Back Into America With Brooklyn Buy
One of Canada’s only pure-play healthcare real estate investment trusts is activating itself south of the border.
Vital Infrastructure Property Trust acquired the 140,000-square-foot medical office at 101 Pennsylvania Avenue in Brooklyn’s East New York neighborhood for $89 million, Crain’s reported. The acquisition works out to more than $635 per square foot.
The seller was Dominion Management Company, which developed the seven-story property about a decade ago. The entire building is leased to nonprofit insurance company EmblemHealth, which is under a long-term deal, fitting Vital Infrastructure’s vision to hold the property for the long term.
A Newmark team including Ben Appel, Adam Spies and Jay Miele arranged the sale, which is part of Vital Infrastructure’s larger plan to get back into the United States market, according to a statement from the firm.
“We believe the U.S. presents an attractive opportunity today given its large and highly fragmented healthcare real estate market, favourable demographic trends, and the continued shift of healthcare delivery from inpatient settings to lower-cost outpatient environments,” head of investor relations Steven Hong told Bisnow via email.
Vital Infrastructure isn’t a nonentity in the United States, though. Excluding the most recent purchase, the company has a dozen of other holdings stateside.
The real estate investment trust rebranded several months ago, BNN Bloomberg reported. It’s been looking to simplify its global portfolio, reinvesting in North America while shifting away from Europe and New Zealand.
Healthcare real estate investment trusts are a big business in the U.S. Last week, Healthpeak Properties and Brookfield Asset Management formed a $2.1 billion joint venture involving an 86-property medical office portfolio spanning 5.6 million square feet, a deal that provided Healthpeak with more than $1 billion in proceeds.
EmblemHealth, formerly known as the Health Insurance Plan of Greater New York, is a critical organization in the state. In May 2019, it leased 440,000 square feet across 13 floors in a 15-year renewal at 55 Water Street, though it recently subleased 57,000 square feet there to a transportation technology company.
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