Ascension Texas: Seton Administrative Office Facility

Facility Highlights

Headquarters facility for Ascension Texas
Strategically located across from Dell Children’s Hospital (an Ascension hospital)
156,000 SF class A office space
Facility was developed in 2008 through a build-to-suit transaction with a for-profit landlord
For-profit landlord had escalated rents more than 40% from 2008 to 2019, with additional 10% rent jump coming from renewing lease in place

SVN | Angelic and our non-profit foundation partner assisted Ascension with negotiation of a purchase and sale contract for the acquisition of the facility from the existing landlord for $82 million
Ascension then assigned the purchase contract to non-profit foundation partner with seller’s advance consent and knowledge
SVN | Angelic and its lender partner provided all the capital and closed on the acquisition of the facility, simultaneously leasing the facility back to Ascension
In connection with the transaction, our non-profit foundation partner transferred the land to Ascension and entered a long-term ground lease

Working with SVN | Angelic allowed Ascension to save working capital for more critical needs and preserve direct debt capacity
Ascension is assured long-term control of the facility through ownership of the land and non-profit foundation’s Ground Lease from Ascension
Significant reduction in rent realized immediately upon closing, in excess of $1.5 million annually
Likely real estate tax exemption, resulting in significant operation expense savings, in excess of $1.3 million annually
Lease structured to allow Ascension to only recognize 10 years of obligation while maintaining long-term control of the asset
Ascension has purchase option at $100 dollars at the end of the lease and the option to buy the building earlier based on declining outstanding debt balance