RMR secures $272.1 million refinancing for Los Angeles medical offices

what happened

BusinessWire reports that The RMR Group, acting for a joint venture it manages, arranged a $272.1 million interest-only mortgage secured by 8631 and 8635 West Third Street in Los Angeles. The financing has a two-year opening maturity and includes three separate one-year extension rights. Its interest rate is set at one-month Term SOFR plus 180 basis points.

Approximately $267 million of the proceeds will retire an existing mortgage that was scheduled to mature in February 2027, while the balance will cover closing expenses. The collateral includes two 11-story medical office properties totaling about 330,000 square feet and two structured parking facilities on the Cedars-Sinai Medical Center campus. The buildings are linked to the hospital by a skybridge, and Cedars-Sinai and its affiliates occupy roughly 60% of the portfolio’s rentable area.

The properties are held by a venture whose asset and property operations are handled by RMR. Private institutional investors are the venture’s principal owners, while RMR client Diversified Healthcare Trust holds a 20% equity stake. Morgan Stanley and BNP Paribas supplied the loan. RMR President and CEO Adam Portnoy said the transaction demonstrated the portfolio’s quality and provided flexibility around the financing term.

why it matters

The refinancing replaces about $267 million of debt due in February 2027 and gives the venture additional time through the extension provisions. Because the coupon is tied to one-month Term SOFR, the transaction also leaves borrowing costs linked to the floating-rate benchmark.

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