Kayne Anderson Real Estate and Synovus Bank Close Sale of $1.3 Billion Medical Office Loan Portfolio
BOCA RATON, Fla., Sept. 18, 2023
Portfolio is backed by 308 medical office properties across the U.S.
BOCA RATON, Fla., Sept. 18, 2023 /PRNewswire/ -- Kayne Anderson Real Estate, the real estate investment arm of Kayne Anderson Capital Advisors, L.P. including its debt platform, Kayne Anderson Real Estate Debt ("KARED"), and Synovus Bank today announced the closing of a $1.3 billion sale of Synovus's medical office loan portfolio (the "Loan Portfolio") to KARED.
The Loan Portfolio consists of 106 floating rate mortgages secured by 308 medical office building ("MOB") properties. The properties span 33 states across the U.S. and are sponsored by a number of blue-chip institutional MOB investors. With approximately 35% of the properties anchored by hospital systems, the portfolio – which totals just under 13 million net rentable square feet – is 92.3% leased on a long-term basis with a weighted average remaining lease term of nine years.
"As one of the leading investors in medical office properties both as an owner and lender, our deep experience and tenured team in the sector equipped us to thoroughly evaluate this opportunity and move with speed and certainty to close," said Al Rabil, chief executive officer, Kayne Anderson Capital Advisors and co-founder and CEO, Kayne Anderson Real Estate. "We are pleased to diversify and enhance our existing real estate credit portfolio with this strategic acquisition as we continue to significantly scale the platform to capitalize on opportunities in today's landscape."
"We crafted a creative capital solution to purchase this attractive medical office portfolio from Synovus and expand our real estate debt platform," said David Selznick, chief investment officer at Kayne Anderson Real Estate. "Together, we brought certainty of execution to a complex transaction. This portfolio underscores our ability to work closely with a like-minded partner to achieve a mutually beneficial outcome."
"As we disclosed during our second quarter earnings call, we believe exiting this line of business will be meaningful for the bank as the capital and liquidity from the sale will allow us to pay down higher-cost wholesale funding in the near term and improve our net interest margin and wholesale funding ratio," said Jamie Gregory, chief financial officer, Synovus. "In addition, by reducing risk-weighted assets, we expect to accelerate our path to targeted capital levels."
The acquisition of the Loan Portfolio contributes to the rapid expansion of Kayne Anderson Real Estate Debt's platform, which has closed on more than $11 billion since the platform launched in 2015.
JLL Capital Markets served as exclusive financial advisor to Synovus.
About Kayne Anderson Real Estate
Kayne Anderson Real Estate is a leading real estate investment firm, managing over $14 billion in assets under management across opportunistic equity, core equity, and real estate debt, with sector expertise in medical office, seniors housing, off-campus student housing, multifamily housing, and self-storage. Kayne Anderson Real Estate is part of Kayne Anderson Capital Advisors, L.P., a $32 billion alternative investment management firm with more than 39 years of successful experience in the real estate, renewable and energy infrastructure, energy, credit, and growth capital sectors. For more information, visit https://kaynecapital.com/real-estate/.
About Synovus Bank
Synovus Bank, a Georgia-chartered, FDIC-insured bank, provides commercial and consumer banking in addition to a full suite of specialized products and services, including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, capital markets and international banking. Synovus has branches in Georgia, Alabama, South Carolina, Florida and Tennessee. Synovus is a Great Place to Work-Certified Company and is on the web at synovus.com, and on Twitter, Facebook, LinkedIn and Instagram.
Cautionary Statement Regarding Forward-Looking Information
This press release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, Synovus' expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," "positions," "plan," "predict," "project," "forecast," "guidance," "goal," "objective," "prospects," "possible," or "potential," by future conditional verbs such as "assume," "will," "would," "should," "could" or "may", or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to update forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements.
These forward-looking statements are made to provide the public with management's current expectations with regard to foregoing transaction. Although Synovus believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this release. Such factors may include, without limitation, the risks and uncertainties discussed and described in (i) Synovus' annual report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 24, 2023, including the risks described in Part 1, Item 1A, "Risk Factors" thereof, and (ii) the other reports filed with the SEC. Many of these risks and uncertainties are beyond the ability of Synovus to control, nor can Synovus predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this release speak only as of the date of this release, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
Kayne Anderson Real Estate
Jon Keehner / Erik Carlson
Joele Frank, Wilkinson Brimmer Katcher
SOURCE Kayne Anderson Real Estate; Synovus Bank