Kaufman Hall & Associates LLC acquired Healthcare Real Estate Capital LLC last week in a move that folds the niche real estate capital markets arena into the array of advisory services it offers healthcare and higher education borrowers.
The Illinois-based independent advisory firm provides advice on specific deals, long-term and strategic financial and capital planning, treasury and capital markets, performance improvement and general real estate.
The firm views the real estate capital markets as another area central to client’s planning and the boutique real estate capital markets advisory firm brings to the table a sole focus in that area for the healthcare and higher education sectors. The acquisition also broadens Kaufman Hall’s client list.
“We feel like healthcare real estate is a very important topic for our clients because they own and lease and operate a significant amount of assets and more broadly they continue to wrestle with capital formation strategies,” Robert Turner, a managing director and Kaufman Hall’s and practice leader in the firm’s Treasury and Capital Markets practice, said in an interview.
“Capital markets continue to evolve. Real estate markets evolve” so the acquisition allows the firm to expand its “services to include something that we think is very important to our clients and so want to provide value in that regard,” Turner said.
The boutique firm HRE with a four-person team located in Florida and Massachusetts provides strategic consulting and transaction advisory services to owners and operators of healthcare and higher education real estate in both the not-for-profit and for-profit universe, universities/academic institutions, physician practices, developers, and institutional investors and private equity firms, among others.
Since its founding in 2008, the firm said it’s been involved with more than $14 billion of sector-specific real estate transactions nationally. The acquisition will expand Kaufman Hall’s footprint to “a broader range of institutions and will help … unlock value in this critical financial asset” for clients,” Kaufman Hall’s chief executive officer R. Wesley Champion said in a statement.
Both sectors have struggled under the weight of the COVID-19 pandemic’s impact on balance sheets and operations with long-term shifts in planning driven by the pandemic and other trends but investor demand and capital flows for healthcare and higher education real estate assets are accelerating due to long-term stability in both sectors, the firms said.
“We have been approached by many firms over the years about strategic combinations,” said E. Hunter Beebe, HRE Capital’s founder and managing principal. “We are looking forward to combining HRE Capital’s transaction-driven capital markets business model with Kaufman Hall’s significant platform, at this transformational moment in the sectors we serve.”
Kaufman Hall founded in 1985 by Kenneth Kaufman, firm chair, has 210 professionals working in Chicago and Skokie, Illinois and California offices with others located across the country working remotely. It is the top ranked adviser on healthcare transactions in recent years and so far this year, according data from Refinitiv. The firm has worked on at least 34 deals valued at more than $5 billion so far this year.