HPA Exchange Completes Full Subscription for $15.4 Million Healthcare Investment in Phoenix

HPA Exchange Completes Successful $15.4 Million Investment

HPA Exchange LLC has achieved a significant milestone by fully subscribing its HPA Dignity Health Arizona DST offering, successfully raising $15.4 million in equity. This investment is tied to a state-of-the-art micro-hospital located in Phoenix and leased entirely to Dignity Health, a subsidiary of the larger CommonSpirit Health network. This significant move showcases HPA Exchange's commitment to bringing quality healthcare real estate investment opportunities to a broader array of investors, especially those accredited investors seeking diversification in their portfolios.

Robert Lee, the co-president and chief investment officer of HPA Exchange, stated, "Our aim is to facilitate access to institutional-grade healthcare real estate for broker-dealers and registered investment advisory firms." With a keen understanding of the long-term potential in healthcare real estate, HPA Exchange has demonstrated confidence in meeting essential community needs through quality healthcare structures. Their offering provides a meaningful opportunity for investors interested in diversifying their real estate investments.

The micro-hospital itself is situated on a 3.92-acre plot at 7171 S. 51st Drive in Phoenix. Completed in 2014, the facility was purpose-built for Arizona General, further strengthening its operational foundations. The hospital spans 38,900 rentable square feet and features a full-service emergency department that operates 24/7, 16 inpatient beds, 10 emergency room beds, two advanced surgical suites, and comprehensive laboratory services, in addition to a pharmacy and cafeteria.

Located in the rapidly developing submarket of Laveen Village, the micro-hospital benefits from Phoenix’s status as the fifth largest U.S. city, with a population exceeding 1.65 million people. The city’s tremendous growth—recorded as the fastest-growing city in the U.S. from 2016 to 2020—coupled with Laveen’s 65% population increase since 2010, heralds a promising environment for healthcare and retail expansions within the vicinity.

Dignity Health, a large nonprofit healthcare network, is part of the larger CommonSpirit Health system that operates over 2,200 care sites across 24 states. Dignity Health operates more than 400 care centers and has a remarkable annual revenue of $10.8 billion as of 2023. With a strong institutional backing, the lease for this hospital is guaranteed by Dignity Health, providing assurance to investors in terms of long-term viability and commitment to the local community.

Thùy Turner, co-president and COO of HPA Exchange, expressed excitement regarding the success of their first DST offering. She remarked, "The property is situated in a growing market with robust fundamentals, making this investment an attractive choice." Turner reaffirmed the intent to continue leveraging strong industry relationships, particularly with their managing broker-dealer, American Alternative Capital.

According to recent reports from Jones Lang LaSalle, there is relentless demand for medical outpatient facilities, underscoring the resilience of healthcare real estate as a reliable investment

In conclusion, the successful raising of $15.4 million for the micro-hospital offering is a testament to HPA Exchange's strategic approach in healthcare real estate. They aim to bolster investment opportunities for accredited investors and continue their commitment to supporting the healthcare industry, especially in rapidly growing urban areas like Phoenix. As they gear up for their next offering in spring 2025, HPA Exchange stands poised to redefine the landscape of healthcare real estate investments.