STORE Capital has completed the acquisition of the Garden State Medical Center Real Estate Portfolio, a collection of seven healthcare properties totaling approximately 46,000 square feet in Central and Southern New Jersey. The transaction, advised by the Healthcare Real Estate team at Brown Gibbons Lang & Company (BGL), marks a significant investment in the state's medical office building sector.
Key Takeaways
- STORE Capital has purchased a seven-property medical real estate portfolio in New Jersey.
- The portfolio, sold by Garden State Medical Center, totals approximately 46,000 square feet.
- The investment bank Brown Gibbons Lang & Company (BGL) acted as the exclusive advisor to the seller.
- A key asset in the portfolio is the Manchester Surgery Center, a modern ambulatory surgical facility in Whiting, NJ.
Details of the Real Estate Transaction
The acquisition involves a portfolio of seven distinct practice locations that are integral to the operations of Garden State Medical Center (GSMC). According to the announcement, Brown Gibbons Lang & Company facilitated the sale, representing GSMC in the deal. The purchase by STORE Capital, a real estate investment trust, underscores the continued institutional investor interest in specialized medical properties.
While the financial terms of the sale were not disclosed, the transaction represents a strategic move for both parties. For GSMC, the sale allows the physician-owned practice to unlock capital from its real estate assets, likely through a sale-leaseback arrangement that ensures continued operation at its established locations. For STORE Capital, the deal adds a stabilized, high-quality medical portfolio to its extensive holdings.
Understanding Sale-Leaseback Transactions
In a sale-leaseback transaction, a company sells its real estate assets to an investor and simultaneously signs a long-term lease to continue using the property. This strategy allows the original owner to convert a fixed asset into working capital, which can be used for expansion, debt reduction, or other business investments, while maintaining operational continuity.
Portfolio Anchored by Modern Surgical Center
The centerpiece of the seven-property portfolio is the Manchester Surgery Center located in Whiting, New Jersey. This facility is described as a state-of-the-art ambulatory surgery center (ASC), a type of outpatient facility that has become increasingly valuable in the healthcare landscape.
The Manchester Surgery Center is equipped to handle a variety of surgical specialties. Its design focuses on patient flow and efficiency.
Facility Specifications
The surgical center includes several key features designed for modern outpatient procedures:
- Two fully-equipped operating rooms
- Four private pre-operative areas for patient preparation
- Four post-anesthesia care unit (PACU) beds for initial recovery
- Four Phase 2 recovery areas for patients preparing for discharge
The presence of a well-equipped ASC makes the portfolio particularly attractive to investors, as these facilities are central to the shift towards providing more medical procedures in cost-effective outpatient settings.
The Rise of Ambulatory Surgery Centers
According to industry reports, the U.S. ambulatory surgery center market is projected to grow significantly in the coming years. Factors driving this growth include lower costs compared to hospital-based surgeries, advancements in surgical techniques allowing for more outpatient procedures, and strong patient preference for convenience.
About Garden State Medical Center
Founded in 2004, Garden State Medical Center has established itself as one of the largest physician-owned specialty practices in the Shore Region of New Jersey. The organization provides a comprehensive range of services focused on musculoskeletal and pain-related conditions.
GSMC's primary areas of specialization are a critical part of the regional healthcare ecosystem. The practice is known for its expertise in several fields, including orthopedic and spine surgery, interventional pain management, sports and regenerative medicine, and rheumatology. This multi-specialty approach allows for integrated patient care within a single organization.
Advisory Role of Brown Gibbons Lang & Company
The transaction was managed by the Healthcare Real Estate team at Brown Gibbons Lang & Company, a leading independent investment bank focused on the global middle market. The team, led by John Riddle and Sean Maynard, served as the exclusive advisor to Garden State Medical Center.
BGL's specialized team offers a range of capital market strategies for healthcare organizations. These services include advising on sale-leaseback transactions, managing asset dispositions, and structuring debt and equity recapitalizations. The firm's role in this deal highlights its deep expertise in navigating the complexities of healthcare real estate investments.
BGL's expertise in capital market strategies includes sale-leaseback transactions, asset disposition, debt/equity recapitalization, private placement, and tax-deferred UPREIT structures, providing tailored solutions for healthcare providers.
BGL has a national presence with investment banking offices in major U.S. cities, including Boston, Chicago, Cleveland, Los Angeles, and New York. Its real estate division operates from Chicago and Cleveland. The firm is also a founding member of REACH Cross-Border Mergers & Acquisitions, giving it a global reach across 30 countries.
