Dallas real estate firm Caddis is getting a boost to plans announced last year to acquire medical office buildings thanks to additional capital supplied by California-based investment giant Invesco Real Estate.
Invesco Real Estate, the real estate arm of Atlanta-based Invesco PLC (NYSE: IVZ), has formed a strategic joint venture with Caddis to purchase up to $1 billion in healthcare real estate in the next three to five years, a goal the Dallas company announced last year. Invesco is investing on behalf of its direct investment program.
The partnership comes as private investment firms and real estate companies are eyeing a potential slowdown in the U.S. economy in the years ahead. Medical office buildings, or MOBs, are widely considered “recession-proof” investments. At the time of Caddis Acquisition Fund I’s first closing last November, the Fund made a simultaneous contribution to the joint venture mandate to enable the partnership’s acquisition of a $111 million 12-asset portfolio across “sunbelt” markets in the U.S. Subsequent to close on the initial portfolio, the partnership acquired three additional MOBs for $56 million, thus totaling 15 medical real estate assets located in Texas, Georgia, South Carolina and Florida. Caddis officials say the joint venture is part of the company’s overall strategy of focusing on long-term ownership and capitalizing on the many opportunities available in the attractive MOB market.
“The newly formed JV with Invesco is a momentous occasion for us at Caddis,” explains Caddis CEO Jason L. Signor. “It marks the changing of our business model from that of being transitional owners to perpetual owners. This strategic shift was the result of our recognizing the recession-resistant nature of MOBs and the importance of fostering long-term relationships with healthcare providers.”
Daniel Kubiak, Senior Director of Portfolio Management at Invesco Real Estate, notes, “Invesco Real Estate has a long track record of investment in medical office facilities through the public markets and is very excited about this venture for one of its direct real estate mandates. The off-market acquisition provides an immediate diversified medical office portfolio with 15 assets in key markets across the “sunbelt” southeast U.S. region. The assets provide a good mix of single- and multi-tenant options and fit well within our existing diversified income-focused strategy. We are looking forward to working with Caddis to add value to our existing portfolio of assets, as well as growing the portfolio over time.”
Mr. Kubiak adds, “At Invesco, we select best-in-class real estate and partners with expert knowledge, which aligns with our investment objectives. We aim to work with a team who align themselves with our investment ethos and are therefore delighted to partner with Caddis on this MOB initiative, as they are a truly suitable partner with an excellent track record.”
Those thoughts were echoed by Caddis executives, including Joneice Preston, Caddis Controller and Director of Accounting.
“At the heart of Caddis are strong relationships,” says Ms. Preston “We appreciate knowing that in the healthcare real estate industry, we are helping community members, and that pride spills over into our corporate culture and is reflected in how hard we work and how we treat one another. When we started working with Invesco, our organizations clicked, and communication was effortless.”
Lance M. Hardenburg, Caddis Executive Vice President Transactions and Partner, noted that Caddis management wants to make it easy for sellers to move quickly from an agreement on terms to the closing of the sale.
“The Invesco-Caddis alliance provides us with some of the lowest-cost capital in the industry, which in turn allows us to fulfill our strategy to quickly and painlessly acquire Class A properties across the nation,” says Mr. Hardenburg.
Invesco Real Estate (NYSE: IVZ) is a global leader in the real estate investment management business with $66.4 billion in real estate assets under management, 471 employees and 21 regional offices across the U.S., Europe and Asia (as of 12/31/17). Invesco Real Estate has been actively investing in core, value-add and opportunistic real estate strategies since 1992. Invesco Real Estate is a business name of Invesco Advisers, Inc., an indirect, wholly owned subsidiary of Invesco Ltd. Invesco Ltd. is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. For additional information, please visit www.invesco.com.
Caddis Partners, LLC is a national real estate development, management and investment firm focused exclusively on healthcare real estate. The firm is comprised of experienced real estate professionals across various disciplines that provide clients with expertise in development, acquisition, financing, construction management, leasing, tenant representation, property management and accounting. Since its inception, Caddis™ has developed or acquired over three million square feet of medical assets valued in excess of $1 billion. In its annual Construction and Design Survey, Modern Healthcare magazine recognized Caddis as the 9th largest development company in the United States. For more information about Caddis, please visit www.Caddis.com.