Cornerstone MOB Fund Acquires $18.6M Portfolio

Cornerstone Companies, Inc. recently announced the purchase of three healthcare real estate properties totaling more than 94,000 sf in Texas, Louisiana and Illinois for a total of $18.6 million.

The properties were acquired by Cornerstone MOB Fund III, a private equity fund focused solely on medical real estate. Over the past three years, Cornerstone has established three MOB funds which have invested more than $59.4 million in the acquisition of healthcare real estate assets.

Cornerstone MOB Fund III is comprised of the following properties:

• The Physicians Surgery Center of Longview, a 12,538 sf multi-specialty ambulatory surgery center located in Longview, TX that is fully leased and operated by the Longview Regional Medical Center.
• The Eye Care Surgery Center of Baton Rouge, a 20,427 sf ambulatory surgery center located in Baton Rouge, LA that is fully leased and operated by the leading ophthalmic practice in Baton Rouge.
• Rockford Medical Building, a 61,174 sf multi-tenant medical office building located in Rockford, IL.

With the S&P 500 Index, the DJIA and HFRI indices all posting negative returns in 2018, health care real estate investments represented a bright spot amongst all investment classes this past year. The NAREIT Index of 18 publicly traded health care REIT’s published a total return of 7.58% in 2018. In its first three months of operations, Cornerstone’s MOB Fund III delivered annualized cash on cash returns to its investors of 10.18%. Cornerstone’s MOB Fund II, now in its third year of operations, delivered an 11% cash on cash return to its investors in 2018. Cornerstone Fund I was sold in October 2018 and delivered a three-year IRR of nearly 17% to its investors. Cornerstone’s investment thesis continues to deliver attractive portfolios of high-quality medical real estate, occupied by long-term, credit tenants, generating sufficient cash flow to deliver superior returns to investors.