WYOMING — One local health care system has opted to sell and lease back one of its key facilities rather than continue to maintain the property itself.
American Realty Capital Healthcare Trust Inc., a New York City-based real estate investment trust (REIT), closed on the $6.2 million acquisition last month of the Cancer Center at Metro Health Village as part of a much larger $214 million deal for 14 medical facilities in nine states.
Metro Health will continue to provide radiation therapy through a joint venture with the University of Michigan Health System at the center following the facility’s sale.
The deal came together when the REIT approached the health system and the co-owners of the cancer center, Triangle Associates Inc. and a group of physicians, said Mike Faas, CEO of Metro Health.
“They kind of wanted to get out and we were fine with it,” Faas said. “We’re not in the mood particularly to tie up our cash in real estate. Whenever we can do this, we will.”
The deal is structured similarly to the sale years ago of Metro’s 13 outpatient centers in the Grand Rapids area that the health system leases back.
Metro Health and its partners developed the 21,502-square-foot radiation oncology center in 2008 for $7.3 million, a good portion of which went for medical equipment. A 15-year lease on the facility runs through June 2022 and will initially generate $600,000 annually for the REIT, according to a quarterly financial report filed with federal securities regulators.
The acquisition of the facility is the third in Michigan for American Realty Capital, which since forming in 2011 has been buying medical office buildings, outpatient centers and senior housing facilities across the country and leasing them back to care providers. The REIT owns 43 health care properties in 16 states.
In September 2012, the REIT acquired the two-story, 100,321-square-foot, fully leased LakeView Outpatient Center in Paw Paw for $30.4 million from Bronson Healthcare Group. Bronson acquired the outpatient center in 2007 when it acquired LakeView Community Hospital.