G&L Realty Gets $264M Refi for Southern Calif. Medical Portfolios
US Bank provided Beverly Hills-based G&L with $176.5 million in financing for five medical office and retail properties in the Golden Triangle district of Beverly Hills, plus a $63.5 million loan for a portfolio of three medical office buildings in other major Southern California submarkets.
By Peter Fabris, Contributing Editor
G&L Realty Corp. closed Nov. 12 on the $263.5 million refinancing of two medical office portfolios in southern California totaling more than 428,000 square feet. US Bank provided $176.5 million in financing for five medical office and retail properties in the Golden Triangle district of Beverly Hills.
The loan offers a future funding facility that would increase the total amount to $200 million. US Bank also provided Beverley Hills-based G&L with a $63.5 million loan for a portfolio of three medical office buildings in other major Southern California submarkets.
“We think the portfolio has great upside potential and should continue to benefit from healthy market fundamentals for medical offices,” said Scott McPherson, senior vice president, marketing manager, US Bank, based in Newport Beach, Calif., in a press release.
In an interview with CPE on Tuesday, McPherson added, “G&L has excellent financial capacity relative to the portfolio. Our relationship goes back two decades.”
The Beverly Hills portfolio features five assets totaling 233,980 square feet located less than three miles from two of the region’s leading hospitals: Cedars-Sinai Medical Center and UCLA Medical Center. “Beverly Hills has some of the highest-end plastic surgeons and dermatologists in the country,” McPherson said. “Once established, those physicians generally don’t want to move their practices.”
The three other properties financed by U.S. Bank are in Sherman Oaks, Santa Clarita and La Jolla, all affluent areas near hospitals. That makes the fundamentals of the total deal attractive, McPherson explained. “There’s always an appetite for well located, stable medical office facilities,” he noted.
The medical facility market seems to be heating up as the economy is improving, McPherson said. “The lending market is getting better and better, with other lenders including CMBS shops coming into the market,” McPherson said. “I think there will be more capital available in the future.”
Nevertheless, investors will continue to regard new development cautiously. “Lenders will still be leery of speculative medical office projects,” he said. “New facilities will need solid pre-leasing deals.”
