CNL Healthcare Properties II Completes Sale of Overland Park MOB

May 8, 2019

CNL Healthcare Properties II Completes Sale of Overland Park MOB

May 6, 2019 | James Sprow | Blue Vault

On May 6, 2019, CNL Healthcare Properties II consummated the sale of the medical office building located in Overland Park, Kansas, to an affiliate of HCP Medical Office Buildings, LLC, for approximately $15.4 million, which resulted in net cash proceeds to the Company of approximately $9.5 million after closing costs and repayment of indebtedness secured by the property. The Company intends to use the remainder of the sale proceeds strategically to pay down the Company’s indebtedness on one of its senior housing assets and for other corporate purposes. The Company does not plan to make a special distribution at this time in its strategic alternatives process as it continues to focus on maximizing value for its stockholders. The Company’s remaining real estate portfolio consists of two senior housing properties.

The Mid-America Surgery Institute property at 5525 West 119th Street in Overland Park was purchased by the REIT in December 2017, for $14.3 million, according to S&P Global. It has 38,496 square feet of GLA. Anchor tenants are Mid America Physician Services and MidAmerica Surgery Institute. It was 100% occupied as of March 31, 2019.

Related: CNL Healthcare Properties II Suspends Distributions, Evaluates Strategic Alternatives

On August 31, 2018, the REIT’s board of directors approved the termination of the Offering and the suspension of the Reinvestment Plan, effective October 1, 2018.  The board also suspended the Redemption Plan and discontinued stock dividends concurrently.  The board of directors appointed a Special Committee comprised solely of independent board members to oversee the process of exploring strategic alternatives to maximize value for the REIT’s stockholders, including, without limitation, (i) an orderly disposition of assets or one or more of asset classes and the distribution of the net sale proceeds thereof to stockholders and (ii) a potential business combination or other transaction with an unrelated third-party or affiliated party of the REIT’s sponsor. In January 2019, the Special Committee engaged SunTrust Robinson Humphrey, Inc., an investment banker, to act as a financial advisor to the Special Committee and, subsequently, the REIT committed to a plan to sell the MOB property, Mid America Surgery Institute. Although the board has formed a Special Committee for the exploration of strategic alternatives, it is not obligated to enter into any particular transaction or any transaction at all. In the meantime, the REIT continues to strategically manage and position its portfolio to drive performance and value.

Sources:  SEC, Blue Vault

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Matthew C. Strife
Blue Vault Services
April 11, 2016

Blue Vault's services are without question great resources for the review of the nontraded products offered.