Name: Kayne Anderson, Remedy seal $7.2B healthcare deal
Uploaded: 2025-10-30T13:23:57.462Z
Duration: 5 min 17 s
Description: Kayne Anderson and Remedy are teaming up on a $7.2 billion deal, acquiring a massive portfolio from Welltower that makes them the largest owner of outpatient medical buildings in the U.S.

Kayne Anderson and Remedy are teaming up on a $7.2 billion deal, acquiring a massive portfolio from Welltower that makes them the largest owner of outpatient medical buildings in the U.S.

Kayne Anderson and Remedy have completed a $7.2 billion joint venture, resulting in control of 53 million square feet of outpatient medical real estate across 44 states. This move comes amid a significant trend in the U.S. healthcare sector, where the majority of care has shifted from hospitals to outpatient facilities due to changes in insurance reimbursement and demographic demand.

The firms have focused on high-margin specialties and higher net worth patient populations, positioning themselves as strategic partners to hospital systems. The transaction is not subject to major regulatory hurdles and is seen as a response to long-term demographic and economic trends in healthcare.

Kayne Anderson, Remedy seal $7.2B healthcare deal

As you may or may not know, 18% of GDP goes to health care. You've got 11,000 Americans every day turning 65, 5,000 Americans a day turning 80. Also importantly, that's the baby boom generation, which is the wealthiest portion of the US population. So just massive demand trends, really, for as far as the eye can see, which is what initially attracted us to the sector almost 20 years ago. And we've got decades of demand in front of us, demographically-driven demand that is not going to stop any time soon. Yeah, I think Ed Yardeni estimated that the baby boomers have about $75 trillion in assets. And I've heard higher estimates than that as well. But the interesting thing to me is that this medical outpatient, these offices have become more and more prevalent. And doctors will steer you, or hospitals will steer you away to these centers now, increasingly. How big of a trend is that? It's a massive trend. In 2010, that's really when insurance companies changed reimbursement dynamics. So we had a hospital-centric system, which was massively expensive. And so insurance companies changed reimbursement rates to incentivize everybody within the health care ecosystem, doctors, patients, hospital systems, to use outpatient care. It's far more affordable. It is a better outcome for everybody involved. So in 2010, 90% of health care was delivered in or around a hospital. Today, it's 90% is delivered outside of a hospital. So you have a massive trend. In 2010, 7% of total practitioners were employees of a hospital health care system. Today, that's about 75%. Five years from now, it'll be 95%. So this train is going down the tracks. And really, what we've done is position ourselves in the middle of this massive shift in the health care ecosystem. So yes, we own real estate. And we own and manage and have huge strategic advantages with the real estate itself. But what we've really done is position ourselves as a true partner to these hospital and health care systems, aiding, assisting, and abetting them in better health care delivery. And with this, JV, as I mentioned, you become the largest owner of outpatient medical buildings. Maybe in the past, that would have perked up years of regulators. How much of this deal being possible to do is because of the regulatory regime that we're in right now? This really doesn't fall under any regulatory dynamic, because it's 44 states. We now control 53 million square feet. But there's nothing from a monopoly or oligopoly perspective that would impact this deal. I think it's important to note, you mentioned the $75 trillion. Matt, I've actually heard higher estimates. But it's a big number. And part of the dynamic is that we focus on the higher end portion of health care delivery. So our top five tendencies by specialty are orthopedics, oncology, neurology, cardiology, and diagnostics. So we are specifically tailoring our business to the highest margin businesses within health care, and specifically to the higher net worth portion of the US population, which we deem to be the most recession resistant, least volatile portion of an already low volatility asset class. I think it's worth noting that medical office, over the past 20 years nationally, has never been below 90.9% occupied. So I would say it's arguably, if not definitively, the lowest volatility asset class that exists in real estate. And obviously, going back 20 years encompasses the GFC, the downturn in 2015, and the global pandemic. How are prices right now? Because on the one hand, you have office and mall that are experiencing problems. We were talking today about the mall in Nyack. On the other hand, you have so many dollars out there chasing the same assets. And obviously, the real estate assets you buy are much more valuable, because you're after the students, the seniors, and health care, which is pretty recession proof. But what are prices like? That is the right question, Matt, because you can have constricting supply and massive demand, but the number one determinant of your return is your cost basis. What we've done is differentiate ourselves in this asset class by really positioning ourselves as a true partner to hospital systems. So we are talking to them about health care delivery all day, every day. We have a wholly owned subsidiary called Percival Health Advisors. So we are a strategic partner to hospital systems, helping them define their marketplace, gaps in their health care coverage, what private practices should they buy to fill those gaps, how should they fund that, what are the implications for their balance sheet, their income statement, their public credit rating. So what we do is very differentiated, which leads to a far better pricing dynamic for us, because the reality is that these hospital and health care systems want us to own their real estate, because we help them in terms of their health care delivery, both in reducing cost, operating expenses, as well as expanding their successful practices and practitioners within their system.

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