MedProperties Holdings LLC and Caddis Partners LLC recently closed on a joint venture acquisition of the RiverGate Medical Center, about one and one-half miles south of downtown Durango, Colo.
The RiverGate acquisition includes a two-story, 38,548 square foot, multi-tenant medical office building (MOB), as well as the attached Animas Surgical Hospital, a 30,505 square foot facility consisting of 12 beds and four operating rooms. Both the MOB and the hospital are 100 percent leased and occupied.
Durango, located in southwest Colorado at the foot of the San Juan Mountains, is home to more than 17,000 residents and is a popular vacation destination.
“RiverGate Medical Center is a very solid investment with significant long-term market share,” says MedProperties Managing Principal Darryl E. Freling. “It’s also a unique asset that is delivering high-quality, much-needed healthcare services to both local and second-home residents.”
“The medical center is in an ideal location near downtown Durango and has the closest emergency room to the nearby skiing and snowboarding areas. It’s home to some of the top orthopedic surgeons in this area,” says MedProperties Managing Principal Roman J. Kupchynsky II.
Another attractive feature of the investment, Mr. Kupchynsky continues, is that the physician-owned surgical hospital is eligible for federal reimbursements for treatment of Medicare patients. The Patient Protection and Affordable Care Act (PPACA) of 2010, commonly called the healthcare reform law, barred new physician-owned hospitals from receiving Medicare reimbursement. However, because the hospital was built in 2005, it is “grandfathered in” and is eligible to receive those federal dollars.
“RiverGate is one of the few physician-owned hospitals that can accept both private pay and government reimbursed patients,” Mr. Kupchynsky points out. “That gives our hospital tenant a sustainable, long-term competitive advantage, which makes the real estate an even more solid investment for MedProperties, Caddis Partners and our investors.”
“This is Caddis Partners’ seventh investment with MedProperties, continuing with what has been a very successful partnership over the years,” says Matt Mattox, Executive Vice President/Partner with Caddis. “These two assets are an integral part of the Durango community and the Four Corners region and are a great fit for our respective platforms. We intend to work collaboratively with our tenant base to make a great healthcare setting even better.”
The RiverGate hospital, which is operated by Nashville, Tenn.-based Symbion Healthcare, offers a full range of services including anesthesiology, ear/nose/throat, emergency medicine, plastic/reconstructive surgery and pain management, as well as quality care for women including gynecology. RiverGate Medical Center is close to downtown Durango, with frontage along the east side of the Animas River and views of the Rocky Mountains. The facility is accessible via Saw Mill Road, which connects with Colorado Highway 3 and is a major thoroughfare to downtown Durango.
Debt for the acquisition was provided by GE Healthcare Financial Services, a division of GE Capital Corp.
MedProperties Holdings LLC is a Dallas-based healthcare real estate private equity firm with offices in Greenville, S.C., that provides qualified developers and owner/operators with a consistent source of equity investment for the development of new, or value-added acquisitions of existing, healthcare-related real estate projects, including both multi-tenant medical office buildings and single-tenant, specialty facilities, as well as selected senior housing communities. MedProperties invests through its discretionary funds, MedProperties Capital Partners LP and MedProperties Investment Partners LP, and is dedicated solely to healthcare real estate. For further information on MedProperties, please visit www.medpropertieslp.com.
About Caddis Partners
Caddis Partners, LLC is a Dallas‐based real estate development, management and investment firm focused exclusively on healthcare real estate. The firm is comprised of experienced real estate professionals across various disciplines that provide clients with expertise in development, acquisition, financing, construction management, leasing, tenant representation, property management and accounting. Since its inception, Caddis has developed or acquired over one million square feet of medical assets valued in excess of $350 million. For more information about Caddis Partners, please visit www.CaddisPartners.com or follow Caddis Partners on Twitter at www.twitter.com/CaddisPartners.