The Canada Pension Plan Investment Board is committing US$143 million in equity to a new joint-venture focused on U.S. medical outpatient buildings.

The investment will be made through a joint venture with IRA Capital and a global institutional investor, with CPPIB holding a 47.5% ownership stake.

The joint-venture is expected to have an acquisition capacity of approximately US$850 million and will target modern outpatient care facilities in growing U.S. communities, where demand is being driven by demographic trends and the continued shift of services from hospitals to outpatient settings.

“The program will target modern outpatient care facilities in growing U.S. communities, where demand is supported by demographic trends and the shift of services from hospitals to outpatient settings ,” said Sophie van Oosterom, a CPPIB managing director and head of real estate.

“We are pleased to establish this program with IRA Capital to invest in high-quality medical facilities across resilient markets, where effective management of the assets can enhance tenant experience and retention. This investment will help deliver long-term, risk-adjusted returns to the CPP Fund for the benefit of CPP contributors and beneficiaries.”

As part of the initial phase, the partners have agreed to acquire a 1.5-million-square-foot portfolio spanning 24 medical properties, including on-campus and advanced outpatient care facilities that support physicians and health-system partners.

IRA said the portfolio spans 11 states and was acquired from a publicly traded REIT with a significant U.S. Midwest presence led by Chicago and a considerable Southwest footprint.

The buildings’ occupiers support high-acuity outpatient services, including outpatient surgery, radiation oncology, and advanced diagnostic imaging, and span nearly every medical specialty. The assets are anchored by leading national and regional health systems, including Ascension, Trinity Health, CommonSpirit, M Health Fairview, Tenet Healthcare, and Advocate Health. Additional notable tenants include CHS, UnitedHealth, UPMC, and Bon Secours Mercy Health.

“The scale and liquidity of this venture allow us to be a long-term, reliable capital partner to leading health systems, helping support their facilities while enabling them to remain focused on what matters most – delivering high-quality patient care and advancing their core operations,” said IRA Managing Partner Samir Patel.

Photo: IRA Capital