Despite the toughest lending environment in recent memory, financing is still available for high quality medical real estate developments. Great Bend Regional Hospital, a portfolio company of Healthcare Properties Fund, recently completed an $11M expansion of their hospital property. The expansion increased the size of the facility from 10,000 square feet to 40,000 square feet, added overnight patient beds, operating rooms, and medical office space. This hospital is a joint-venture between local physicians and Nueterra Healthcare.
In March, Nueterra Real Estate broke ground on the 65,000-square-foot $35M Methodist McKinney Hospital, also a portfolio company of our fund. This hospital is a joint-venture between local physicians, Methodist Health System, and Nueterra Healthcare. It will feature six operating rooms, two procedure rooms, 15 overnight patient beds, comprehensive diagnostic imaging, and a 24-hour emergency room.
Financing is also secured for two other portfolio companies, which we expect will break ground in the next few months.
While it wasn’t easy to arrange financing for all of the above developments, it wasn’t impossible, contrary to some recent reports. Marred in the controversy of the federal TARP program, some banks definitely have tightened their lending standards recently and some have quit lending altogether. However there is still plenty of capital available from healthy banks for the highest quality projects. Medical developments such as ambulatory surgical centers and specialty hospitals appear to be the types of quality developments that these banks now covet and represent a move away from other commercial, retail, and residential developments.