Pension giant bets on medical hubs to boost long-term, risk-adjusted returns
Canada’s pension giant is backing a large push into US medical real estate, tying long-term retirement savings to growing demand for outpatient care.
Canada Pension Plan Investment Board (CPP Investments) is putting US$143m of equity into a new joint venture with IRA Capital and a global institutional investor to target US medical outpatient buildings, with an expected buying capacity of about US$850m.
CPP Investments will hold a 47.5 percent stake in the joint venture, which aims to acquire modern outpatient facilities in growing US communities where demand reflects demographic trends and the shift from hospitals to outpatient care.
Sophie van Oosterom, managing director and head of real estate at CPP Investments, said the program will focus on “modern outpatient care facilities in growing US communities, where demand is supported by demographic trends and the shift of services from hospitals to outpatient settings.”
She added that effective asset management can “enhance tenant experience and retention” while supporting “long-term, risk-adjusted returns” for the CPP Fund’s contributors and beneficiaries.
As part of the venture, the partners agreed to buy an initial 1.5 million square-foot portfolio of 24 medical properties, including on-campus and advanced outpatient care facilities that support physicians and health-system partners.
