Healthpeak Properties, Inc. (NYSE:DOC) (“Healthpeak”) and Brookfield Asset Management (NYSE:BAM, TSX:BAM) (“Brookfield”), today announced the formation of a long-term strategic capital partnership through a joint venture involving a portfolio of outpatient medical buildings across the United States.

The portfolio contributed by Healthpeak is comprised of 86 properties totaling approximately 5.6 million square feet, valued at approximately $2.1 billion. The portfolio is diversified across 11 states, including Kentucky, Indiana, Pennsylvania, Arkansas, Illinois, Minnesota, New Jersey and New York, and is 95% leased with a weighted average remaining lease term of six years.

Brookfield and its affiliates own a non-controlling 49% interest in the venture. Healthpeak retained a 51% controlling interest and serves as managing member, providing asset management, leasing, and property management services. Healthpeak received gross proceeds of approximately $1.025 billion from the sale of the 49% interest, implying a trailing cash capitalization rate of approximately 5.9% and a valuation of approximately $380 per square foot. Healthpeak will retain a call right for a finite period beginning after year seven to repurchase Brookfield’s interest at a price sufficient to provide Brookfield with a 6.5% net annual rate of return excluding initial transaction expenses.

The transaction provides Healthpeak with long-term capital while preserving ownership, operational control, and continued participation in the portfolio’s future value creation. The venture is expected to be consolidated on Healthpeak’s financial statements, with Brookfield’s investment recognized as a non-controlling equity interest.