Cypress West, TPG Angelo Gordon Form $300M JV

April 17, 2024

Arranged by a CBRE unit, the partnership will focus on medical office buildings across the Sun Belt.

In March, Cypress West and TPG Angelo Gordon purchased an 85,000-square-foot medical office building at 9377 E. Bell Road in Scottsdale, Ariz. *Image courtesy of courtesy of CBRE Investment Banking.*

Cypress West Partners and TPG Angelo Gordon are expanding their health-care real estate holdings through a programmatic joint venture aimed at acquiring as much as $300 million in medical office assets across the Sun Belt over the next two years.

The joint venture was arranged by CBRE Investment Banking, which served as financial advisor for Cypress West Partners in connection with the transaction. The team included Michael Yang, senior managing director of CBRE Investment Banking.

The focus will be on acquiring medical office buildings in strategic, high-growth Sun Belt markets that provide the opportunity to generate core-plus and value-add returns through leasing, repositioning and redevelopment.

The first acquisition was completed in March. The joint venture purchased an 85,000-square-foot medical office building at 9377 E. Bell Road in Scottsdale, Ariz. Healthpeak Properties sold the asset for $21.3 million, according to CommercialEdge data.

The joint venture was seeded with the recapitalization of a four-asset portfolio of properties in Arizona and California owned by Cypress West Partners. The portfolio totaled about 200,000 square feet and is 97 percent occupied by a diverse roster of health-care tenants.

Experienced investors

Both firms are leading specialists in the sector who can leverage their combined experience in scaling and operating their joint medical office platform.

Cypress West, led by co-founders Chris Cumella and Jeff Johnson, is based in Orange County, Calif., and Dallas and focuses on acquiring, developing and operating institutional quality health-care real estate throughout the U.S. The Cypress West portfolio includes close to 2 million square feet of medical office properties, of which more than 250,000 square feet are currently in various stages of development.

The firm broke ground in April 2023 on Ocotillo Medical Collaborative, a 22,000-square-foot medical office building on a 2.5-acre site in Queen Creek, Ariz. The Class A medical office building was already 87 percent leased prior to the start of construction. The property, which is about 40 miles from downtown Phoenix, was fully leased to five tenants when it opened in November.

Last month, TPG Angelo Gordon and another joint venture partner, Sendero Capital, grew their Rhode Island portfolio with the acquisition of a 30,000-square-foot, multi-specialty health-care facility in Warwick, R.I. The joint venture purchased the Class B asset for $8.1 million from NeuroHealth, according to Kent County records. NeuroHealth remains as the anchor of the three-story building at 227 Centerville Road.

It was the fifth acquisition through their programmatic joint venture that launched in July 2023. The investment vehicle, which is focused on outpatient health-care real estate in the Northeast over a two-year period, has the capacity to make up to $300 million in investments. In November, the joint venture received a $75 million credit facility that was seeded with four assets totaling 201,369 square feet in Connecticut, Rhode Island and New Hampshire.

Angelo Gordon was founded in 1988 as a diversified credit and real estate investing platform. TPG announced in May it was acquiring Angelo Gordon for about $2.7 billion in cash and equity. Now known as TPG Angelo Gordon, it operates as an investing platform of TPG. The platform currently manages approximately $78 billion across a broad range of credit and real estate strategies.