Dealmaker: Gantry Completes $267M Financing for Four Medical Office Facilities

Gantry, San Francisco, secured $267 million in permanent financing, including a construction-to-permanent loan, for a four-building portfolio of single-tenant medical office properties leased to the Department of Veterans Affairs.

Veterans Affairs facility

The VA uses the buildings as community-based outpatient clinic medical facilities.

Gantry Principal George Mitsanas, Senior Director Peter Hillakas and Associate Austin Ridge with the firm’s Los Angeles office represented the borrower. A life company provided the 20-year loans as separate asset-specific loans placed with a primary sponsor.

“Long-term, credit tenant lease agreements with experienced developers capable of delivering state-of-the-art facilities that meet the budget and mission of the VA are the key element to a successful public-private partnership model expanding medical services for veterans across the country,” Mitsanas said. “In the current market climate, any long-term credit tenant lease is extremely attractive to lenders targeting their allocations to long-term fixed-rate debt at what remain attractive rates, even with the shifts in the current market cycle.”

Mitsanas said the borrower is an experienced sponsor for these projects and a key partner in the process with VA and other government agencies they serve, which is a critical element in the underwriting the loans.

The subject properties included:

-A 57,579-square-foot facility at 2285 Challenger Way in Santa Rosa, Calif., that will support Veterans Administration services for California’s North Coast region. The one-story building on eight acres delivered early this year.

-A 196,185-square-foot facility within the Chesapeake Regional Healthcare campus on Knells Ridge Boulevard in Chesapeake, Va. When completed, the two-story building will serve as a satellite facility to the Veterans Affairs Medical Center hospital in Hampton, Va.

-A 120,575-square-foot facility at 3550 Lakeland Highlands Road in Lakeland, Fla. When operational, the two-story building will consolidate and expand services currently provided by two VA CBOC facilities set for closure.

-A 73,000-square-foot facility at 1051 Hooper Avenue in Toms River township in Ocean County, N.J. The two-story building will sit next to a new 121,000-square-foot three-story building that will house the county’s Board of Social Services as well as the county’s Veterans Service Bureau.