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Capital One Closes $32.8 Million Loan to Medistar Corporation

June 03, 2016, 07:17 AM
Filed Under: Real Estate
Related: Capital One Bank

Capital One announced it has provided a $32.8 million loan package to refinance a portfolio of three medical office buildings in Texas and Colorado owned by Houston-based Medistar Corporation.  Medistar is a full-service real estate development company that specializes in the design, development, financing, acquisition, and construction of medical office buildings, hospitals, long-term acute-care hospitals, and other medical facilities. Vice President Jim McMahon of Capital One Healthcare originated the transaction.

Capital One structured the $32.8 million transaction to cover existing debt of $26.3 million, provide $4 million for future tenant improvements and leasing commissions, and allow a $2 million earnout if certain loan metrics are met during the term. The three-year adjustable-rate loan features an 18-month interest-only period, followed by amortization on a 30-year basis.

“Medistar has developed extensive relationships with healthcare companies and large hospital chains across the nation, an important advantage for medical office building owners in this rapidly consolidating field,” said, Capital One Healthcare Managing Director Erik Tellefson. “Thanks to these relationships, the prospects for these facilities are very good.”

The portfolio of properties refinanced by Medistar consists of Ashford Medical Plaza and River Oaks Tower in Houston, and Austin Bluffs in Colorado Springs.  Medistar acquired the River Oaks Tower in 2004, and the Ashford Medical Plaza in 2007. The company developed Austin Bluffs in 2001; the property includes office space and a surgical center, with five operating rooms and facilities for recovery, pain treatment, and overnight care.

“Capital One worked closely with us to structure an attractive financing solution for this complex transaction,” said Rick Zachardy, Senior Vice President and Chief Financial Officer of Medistar. “As we continue to grow our health care real estate portfolio, we look forward to working again with the Capital One team.”

Capital One Healthcare is a leading provider of financial services to the industry with over $11 billion in total outstanding balances. Customers across healthcare sectors—including senior housing, healthcare services, pharmaceuticals, medical devices, healthcare IT and medical offices—rely on Capital One Healthcare to finance acquisitions, refinance existing debt, support working capital needs and fund growth initiatives. With in-depth expertise, our team of professionals creates solutions tailored to meet the needs of our customers.

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