As reported in The Real Report by Joe Clements
PROVIDENCE, RI— An “extremely wellmaintained” medical office portfolio encompassing 10 buildings totaling 301,700 sf here and in Lincoln and East Greenwich has been acquired by Albany Road Real Estate Partners from longtime owner F.H. French Co. Inc. for $60.5 transaction and arranged the acquisition debt for Albany Road, a Boston-based operation which now has over six million sf under management in New England and the southeastern United States, assets valued in excess of $750 million.
A native Rhode Islander and Copley Real Estate Advisors alum with past investment experience in the Ocean State, Albany Road President Christopher J. Knisley had reportedly been angling to acquire the F.H. French holdings ever since launching his firm five years ago this summer. Informational materials promoting the deal cite the rebounding regional economy, which was in a shambles to begin this decade, coupled with the “recession-proof” healthcare arena fueled by an aging demographic and cemented by the overall pedigree of the real estate which was built between 1985 and 2013 under the stewardship of F.H. French & Co., a multi-generational real estate firm whose roots date to 1935.
F.H. French Co. in 2001 was sold to Jennifer Cookke by her parents, Beverly Keigwin and Jack Keigwin, who had taken over the firm in the 1980s from Beverly’s father, founder Fred Hubert French. They subsequently concentrated on CRE development and management including the 10 properties that encompass the Blackstone Valley Medical Portfolio now flying the Albany Road flag.
More than half the space—175,350 sf—is in East Greenwich, deemed the fourth most affluent community in Rhode Island. Albany Road owns the Lifespan Ambulatory Care Center at 1454 South County Trail and three other structures at 1351 South County Trail in the Greenwich Medical and Office Park. There are two Providence buildings at 195 Collyer St.
(pictured above) and 208 Collyer St., that footprint of 73,500 sf a few blocks from Miriam Hospital and near Exit 25 of I95. The LIncoln buildings changing hands, a total inventory of 54,775 sf, are at One Commerce St. and at 6 and 7 Blackstone Valley Pl. I295 where it convenes with Routes 116 and 146 is also close to those holdings.
At a hair over $200 per sf, the properties were attained by Albany Road for approximately 20 percent discount to replacement cost, a metric seen as enabling the firm to compete on rents with any new construction which might come on line. For the time being, the portoflio has a solid roster of loyal denizens, among them Lifespan, an integrated statewide academic health care system affiliated with Rhode Island Hospital and Miriam Hospital. Lifespan leases over 128,000 sf and comprises the majority of an investment grade tenant constituency occupying 48 percent of the space, firms whose weighted average lease expiration runs to June 2023 versus a portfolio average of May 2021 for all leases. Over the past 10 years, occupancy has never dipped below 96 percent while averaging 98 percent. “It is essentially full,” says Colliers Capital Markets principal Douglas Jacoby.
As to Albany Road’s latest conquest, “I think they will do very well with it,” Jacoby predicts. “The quality of the real estate is especially good plus having Lifespan as your anchor tenant is a definite positive that has to make you feel comfortable . . . And Chris (Knisley) knows the Providence market really well.” The Coliers brokerage effort came from principal Scott Dragos, Assistant VPs Anthony Hayes and Timothy Mulhall and Associate Dan Hines, whereas CoChairman Kevin Phelan and Senior VP Jeff Black cobbled together the debt package.
Albany Road also indicates that Jennifer Cookke has agreed to remain on as property manager of the MOB portfolio. From a seamless transition and tenant relationship perspective, “we view this development as highly positive,” the company relays of Cookke’s retention, her role heretofore considered a leading reason the asset was touted for being “extremely well-maintained” on top of Colliers noting the structures average just over a dozen years in age.