Rethink pays $1,460 a foot for one hospital lease

Rethink Healthcare Real Estate has paid $16.2 million for the UF Health / Intuitive Health emergency department and urgent care center in Eustis, Florida, an 11,097-square-foot building in the Orlando metro that UF Health Leesburg Hospital leases. Connect CRE reported the acquisition, with no named seller and no cap rate.

At $16.2 million for 11,097 square feet, the Eustis building prices at roughly $1,460 a foot, close to two and a half times the $613 a foot Healthcare Realty paid for the 106,092-square-foot Greenwich Medical Center earlier this month, as this publication reported. That spread is the distance between a Class A outpatient campus with a rent roll deep enough to finance at scale and a single purpose-built emergency facility whose tenant is a health system, between buying real estate and buying a lease.

Connect CRE presents the trade as evidence of healthcare real estate's durability as an asset class, which is a large claim for a single 11,097-square-foot building with one tenant. What the trade carries is the per-foot premium that licensed, health-system-leased space commands over general-purpose outpatient buildings, a number a seller of either type should want before it goes to market.

Rethink's own description of its strategy—institutional-quality ambulatory facilities, developed and acquired directly, often alongside developer partners and health-system providers—implies a portfolio business, but at $16.2 million the firm bought one building, one tenant, and no diversification. The lack of diversification is the point of the format: with a single licensed emergency department on the lease, the buyer is underwriting the tenant's willingness to keep operating in Eustis as much as the residual value of 11,097 square feet.

Newmark's deal team carried eleven names, among them Justin Shepherd, Jay Miele and Ben Appel, a heavy roster for a $16.2 million sale and a fair illustration of how healthcare coverage is staffed inside the national brokerage platforms.

The two healthcare trades reported this week bracket the bid from $613 a foot for a Greenwich outpatient campus to about $1,460 for an emergency department in the Orlando metro, and which number a seller sees depends on which asset it owns. The next small-format emergency or urgent care facility to trade in Florida will show whether Rethink bought a market or one hospital's lease.