(Editor's note: This article has been updated throughout.)
Carrus Specialty Hospital and Carrus Rehabilitation Hospital in Sherman are looking to expand their operations after a new landlord recently bought their shared property.
Global Medical REIT Inc., a Maryland-based corporation which specializes in the acquisition of health care facilities, purchased the property for $26 million. The purchase agreement, which was officially closed on June 30, makes Global Medical REIT the new owner of a combined 81,352 square feet of medical space.
“All the leadership is staying the same,” Carrus Hospital Chief Executive Officer Jon Rains. “What will change is now that the facility is no longer physician-owned, we have the ability to expand. Prior to that, facilities could not expand under physician owners because of federal regulation. So now, that that’s not the case we’ll be able to continue to grow and expand. So there will be more we can do for the community because we’re always at capacity at both of our hospitals.”
Under the Affordable Care Act, physician-owned medical facilities that accept Medicare and Medicaid are not allowed to expand operations except under limited circumstances. Rains said Carrus is excited about the change and emphasized that Carrus leadership and physicians will remain in control of operations.
As part of the deal, Global Medical REIT has agreed to provide an improvement allowance of $2 million and up to $5 million to expand the hospitals in the future, subject to certain conditions.
In a May 23 release issued by Global Medical REIT, CEO David Young said the company spent much of 2016’s first quarter working on a number of acquisitions that he believed would go over well with its investors.
“One of those opportunities, the acquisition of the Carrus Specialty Hospital and the Carrus Rehabilitation Hospital will be a great addition to our portfolio when the deal closes, with very healthy rent coverage and an attractive cap rate,” Young said.”
Under the purchase agreement and a 20-year, triple net lease, Carrus’ monthly rent will be based on a capitalization rate of 8.8 percent.
Carrus Hospital is currently constructing a new medical office building to be located at 1724 W. U.S. Highway 82, which is just east of its current campus. The hospital's 31,000-square-foot medical office building will be two stories with a covered canopy at the front entrance and 155 parking spaces.