Healthcare consultancy Kaufman Hall on Monday said it purchased Healthcare Real Estate Capital, a national advisory firm focused on the healthcare real estate market.
Kaufman Hall announced the acquisition on Monday, which will allow Kaufman Hall to advise health systems struggling with real estate strategies for the properties they own, lease and operate.
As markets continue to evolve, the changes affect how facilities finance, develop and manage real estate assets, said Robert Turner, a managing director at Kaufman Hall.
“Healthcare real estate as a component of the broader real estate industry has been a relatively stable and attractive opportunity for real estate investors, so it’s become a popular place to deploy capital,” Turner said. “An independent strategic advisor with an in-depth understanding of the sector is vital.”
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Due to healthcare clients continuing to face essential capital expenditure needs and other expenses, particularly during the COVID-19 pandemic, there is a growing frustration that there are more uses for funds than financial sources, he said.
So, Kaufman Hall plans to work with HRE Capital to analyze companies’ real estate portfolios and find ways to match sources of funding with various uses.
HRE Capital, which was founded in 2007, provides consulting and transaction advisory services to owners and operators of healthcare real estate, including for-profit and not-for-profit health systems, universities and academic institutions, physician practices, developers, and institutional investors.
Healthcare has traditionally been an asset-heavy business in terms of property, though industry shifts toward value-based care options, and outpatient rather than inpatient services, are creating a more asset-light movement, said Joe Lupica, chairman of Newpoint Healthcare.
A real estate firm can help healthcare systems be more efficient with the assets and resources they decide to keep, he said.
“Dealing with these large real estate portfolios is not just an investment question, it’s a matter of managing the weight on your balance sheet and your capital structure,” Lupica said.
The advisory companies are looking forward to combining HRE Capital’s transaction-driven capital markets business model with Kaufman Hall’s platform, said E. Hunter Beebe, founder and managing principal of HRE Capital, in a news release.
“Kaufman Hall’s depth of resources, unparalleled client relationships, and complementary yet distinct offerings represent a unique opportunity for us to leverage our experience, relationships, and approach,” Beebe said.
Because real estate is a significant and valuable asset in the healthcare industry, clients need independent, strategic advice to guide their operational and financial decision making, said R. Wesley Champion, Kaufman Hall CEO, in a news release.
“Together, Kaufman Hall and HRE Capital will deliver the rigorous analytics, unwavering advocacy, and service excellence our clients rely on to a broader range of institutions and will help C-Suite leaders in healthcare … unlock value in this critical financial asset,” Champion said.
