Why KKR Shares Are Trading Higher Today

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Zinger Key Points
  • KKR forms strategic JV with Healthcare Realty Trust to invest in medical outpatient buildings, starting with 12 properties.
  • Healthcare Realty to contribute properties valued at $382.5M; KKR commits up to $600M, boosting JV potential to over $1B

KKR & Co. Inc. KKR and Healthcare Realty Trust Incorporated HR have inked a strategic joint venture (JV) relationship to jointly own and invest in quality medical outpatient buildings.

The JV constitutes 12 properties that are medical outpatient buildings, having a total of 762,399 square feet (98% occupied), across seven top markets located predominantly on or adjacent to leading hospital campuses. 

As per the terms, Healthcare Realty will contribute 12 of its existing properties to seed the JV at a value of $382.5 million, representing a cap rate of approximately 6.6%. 

The contribution of the properties is expected to occur throughout May and June, upon satisfaction of customary closing conditions.

The Healthcare REIT expects to receive around $300 million in proceeds for the contribution. The company will also partner with KKR to explore additional acquisitions, including the potential contribution of more Healthcare Realty properties to the JV.

KKR will make an equity contribution of 80%, while Healthcare Realty will retain a 20% interest and will manage the JV along with overseeing day-to-day operations and leasing of the properties. 

KKR has also committed up to $600 million to the JV to increase the potential value of the JV to more than $1 billion.

Also, in another release today, KKR announced the signing of definitive agreements to acquire Healthium Medtech Ltd. from an affiliate of Funds advised by Apax Partners LLP.

As of the quarter-end, KKR's cash and investments stood at $14.6 billion.

Investors can gain exposure to the stock via Northern Lights Fund Trust IV FMC Excelsior Focus Equity ETF (FMCX) and EA Series Trust WHITEWOLF Publicly Listed Private Equity ETF (LBO).

Price Action: KKR shares are up 2.82% at $97.69, while HR is up 1.31% at $15.08 at the last check Monday.

Photo via Shutterstock

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