The RMR Group Secures $272M Refinancing for Cedars-Sinai Medical Offices

The RMR Group Inc. has announced on behalf of its managed joint venture that it has facilitated a $272.1-million interest-only mortgage financing secured by 8631 and 8635 West Third Street in Los Angeles, California. The loan has a two-year initial term with three one-year extension options and bears interest at one-month Term SOFR plus 180 basis points. Proceeds from the financing were used to repay approximately $267 million of existing mortgage debt scheduled to mature in February 2027 and to fund closing costs.

The collateral consists of two 11-story medical office buildings totaling approximately 330,000 square feet, together with two structured parking garages, located on the campus of Cedars-Sinai Medical Center and connected to the hospital by a skybridge. Cedars-Sinai and its affiliates are the portfolio’s anchor tenants, occupying approximately 60% of the portfolio’s total rentable square feet.

“This refinancing reflects the quality of this medical office portfolio, which is located on the campus of one of the nation’s leading healthcare institutions,” said Adam Portnoy, president and chief executive officer of RMR. “By refinancing its upcoming maturity with a new loan that provides term extension flexibility, the joint venture is well positioned to continue benefiting from the portfolio’s strong anchor tenancy, strategic location and attractive long-term fundamentals. The successful execution of this transaction underscores the value of RMR’s integrated real estate platform and our ability to deliver capital solutions that support our clients’ investment objectives.”

The portfolio is owned by a joint venture for which RMR provides asset and property management services. The primary owners of the venture are private institutional investors, and Diversified Healthcare Trust, an RMR client, owns a 20% equity interest. Morgan Stanley and BNP Paribas provided the financing. Hogan Lovells Cadwalader US LLP acted as counsel to the lenders, and Sullivan & Worcester LLP acted as counsel to the borrower.

Information for this article was sourced from The RMR Group.