Information on the Target

Bain Capital’s real estate team, in collaboration with Evergreen Medical Properties, has successfully acquired a medical outpatient facility spanning approximately 122,000 square feet, located in the Washington, DC metropolitan area. This transaction marks the joint venture's inaugural entry into the DC market, where they intend to focus on acquiring, renovating, and managing essential medical outpatient facilities.

The facility, situated at 2440 M Street in the West End of downtown Washington, DC, is a contemporary and top-tier space that draws patients from Georgetown and nearby regions, including Virginia and Maryland. Recently renovated in 2024, the property is currently 83% leased to a diverse range of clinical tenants, illustrating its operational viability and demand.

Industry Overview in the Target’s Specific Country

The healthcare real estate sector in the United States has witnessed significant growth in recent years, driven by increasing demand for outpatient services and a shift towards value-based care. As healthcare providers focus on improving patient outcomes, the need for modern, accessible facilities has become paramount. This trend is particularly strong in urban areas like Washington, DC, where population densities are high, and healthcare needs are rising.

Moreover, with an aging population and continued advances in medical technology, the outpatient care segment is expected to thrive. Investors are increasingly recognizing the stable yields offered by healthcare real estate, which tends to be more resilient in economic downturns compared to other sectors, bolstering its appeal.

The West End, where the new acquisition is located, has emerged as a prime submarket characterized by its proximity to major healthcare institutions, such as George Washington University Hospital. This area is known for attracting a growing number of healthcare providers seeking to serve the local population effectively.

As healthcare systems become increasingly integrated and focused on comprehensive patient care, the demand for high-quality outpatient facilities will likely continue to rise. This creates an advantageous environment for investments in medical properties, making it a critical area for growth in the healthcare real estate market.

The Rationale Behind the Deal

The acquisition of the outpatient facility aligns with Bain Capital and Evergreen's strategic investment approach, which emphasizes the identification and enhancement of high-quality medical properties. Joe Marconi, a Partner at Bain Capital, articulated that this expansion signifies a logical step in their thematic investing strategy, designed to create value in key sectors.

With the facility's strategic location in an attractive submarket, the joint venture anticipates it will not only serve as a preferred destination for patients but also attract sought-after healthcare providers, thereby enhancing its operational success and long-term value.

Information About the Investor

Bain Capital Real Estate was established in 2018, focusing on investments in sectors that are often less accessible but backed by powerful secular trends. The team has been executing its investment strategy since 2010 while part of Harvard Management Company, collectively committing over $9 billion of equity across various sectors.

The firm is renowned for its focus on assets where it can leverage deep industry expertise to boost operational efficiencies and impact. Bain Capital is among the leading private investment firms globally, boasting approximately $185 billion in assets under management and a robust global platform that enhances its investment insights and capabilities.

About Evergreen Medical Properties

Evergreen Medical Properties operates as a full-service real estate company, with facilities in Denver and Atlanta. The company focuses on investing, leasing, and managing healthcare facilities across the United States through a partnership-oriented approach. This strategy enables Evergreen to build sustainable relationships with healthcare providers and systems while enhancing the operational flexibility of its investments.

By unlocking capital and creating durable value, Evergreen aims to facilitate the growth of its portfolio in key markets, contributing to the overall improvement of healthcare delivery in the regions it serves.

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The acquisition of the outpatient medical facility in Washington, DC, is poised to be a commendable investment for Bain Capital and Evergreen Medical Properties. Given the facility’s strategic location and the increasing demand for outpatient services, this investment aligns well with market trends that indicate a robust growth trajectory.

The operational model of combining investment with facility management enhances the prospects for maximizing the property's income potential, making it an attractive venture in a competitive market. Additionally, the allocation of resources towards renovating and improving the facility will likely yield positive returns, as it positions the property for long-term success.

Moreover, both Bain Capital and Evergreen's established reputation in the healthcare real estate sector lends credibility to this acquisition. Their combined expertise should ensure that the facility meets the evolving needs of patients and providers alike, ultimately leading to enhanced operational performance.

In conclusion, this strategic move to enter the Washington, DC market not only broadens the joint venture's portfolio but also positions them favorably within a sector that is expected to continue flourishing in the years to come.

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