Brookfield Snags Stake In $2B Medical Office Venture

Brookfield Asset Management inked a second billion-dollar-plus deal this week, betting on a real estate investment trust focused on medical offices.

Brookfield is taking a stake in Healthpeak Properties’ $2.1 billion portfolio, the companies announced on Monday. The healthcare REIT and the asset giant entered a joint venture centered on an 86-property portfolio that spans 5.6 million square feet.

The portfolio stretches across nearly a dozen states, including Illinois, New York and New Jersey. The properties are a combined 95 percent leased with a weighted average of six years remaining on leases.

Healthpeak is the managing member of the joint venture, holding on to a 51 percent controlling interest in the partnership. Brookfield and its affiliates own the remaining 49 percent stake. Healthpeak’s proceeds from the partnership exceed $1 billion.

Brookfield’s investment will be recognized as a non-controlling equity interest. The transaction, advised by Newmark, infuses the portfolio with long-term capital while allowing Healthpeak to hold on to ownership.

“This transaction advances our capital allocation priorities and highlights our unique ability to capture the favorable tailwinds driving demand for outpatient care,” Healthpeak chief executive officer Scott Brinker said in a statement.

The two companies have at least a little bit of familiarity with one another. Five years ago, Brookfield paid $664 million for a Sunrise Senior Living 32-property portfolio, which was sold by the real estate investment trust.

Last year, major healthcare REIT Welltower moved to sell a $6 billion medical office portfolio of 296 buildings across 34 states to Chicago-based Remedy Medical Properties, part of a pivot that allowed the firm to double down on senior housing acquisitions.

Brookfield earlier this week teamed up with the Canada Pension Plan Investment Board to agree to acquire LXP Industrial Trust in an all-cash deal valued at $5.2 billion, including net debt and preferred equity. The transaction price of $61.20 per share represents a 19.8 percent premium over LXP’s 90-day average share price.