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Latham & Watkins Advises Healthcare Realty Trust in Strategic Joint Venture With KKR

May 8, 2024
Multidisciplinary team advises the REIT in deal that will look to grow its network of medical outpatient buildings.

Healthcare Realty Trust Incorporated (NYSE:HR) has announced that it has entered into a strategic joint venture (JV) relationship with KKR to jointly own and invest in quality medical outpatient buildings. Healthcare Realty expects to receive approximately US$300 million in proceeds for the contribution of a seed portfolio to the JV and will partner with KKR to explore additional acquisitions, including the potential contribution of more Healthcare Realty properties to the JV. Under the terms of the agreement, Healthcare Realty will contribute 12 of its existing properties to seed the JV at a value of US$382.5 million, representing a cap rate of approximately 6.6%. KKR will make an equity contribution to the JV equal to 80% of the value of the properties. Healthcare Realty will retain a 20% interest and will manage the JV, as well as continue to oversee day-to-day operations and leasing of the properties. KKR has also committed up to US$600 million to the JV to pursue additional acquisitions or contributions of high-quality stabilized assets that are a match for its long-term capital base.

Latham & Watkins LLP advised Healthcare Realty Trust in the transaction with real estate and corporate teams led by Orange County partner Hilary Strong and San Diego partner Ann Buckingham, with associates Nicole Stauffer, Jacob Axelrod, Madeleine West, and Adrianna Robakowski. Advice was also provided on tax matters by Century City partner Ana O’Brien and counsel Will Kessler and on regulatory matters by counsel Catherine Hein.