Related Cos. Buying Stake in CareMax to Develop Senior Health Centers
The Hudson Yards developer hopes to open about 75 new centers in the next three years
By Celia Young July 13, 2021 11:12 am
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Related Companies is acquiring up to a 9 percent stake in Miami-based health care provider CareMax, with plans to develop about 75 senior health centers in underserved areas nationwide.
Related bought $5 million of CareMax stock, at a price of $10 per share as part of the agreement, and will serve as an investor, advisor, developer, and even as landlord of CareMax health centers, The Wall Street Journal first reported. CareMax or its affiliates will operate the new facilities, according to a press release.
“Quality healthcare is essential for all communities to thrive,” Bryan Cho, executive vice president of Related Companies, said in a statement. “We chose CareMax to help expand their reach because their fully integrated model is uniquely positioned to address the systemic issue many low-income seniors face.”
Cho will join the CareMax board of directors as part of the deal.
The Hudson Yards developer also received warrants to purchase up to 8 million additional shares at $11.50 per share, which can be exercised based on when the new medical centers that Related helped create are opened, according to the release.
CareMax serves 65,000 people with its 42 Florida medical centers — about 22,000 of which are seniors — and will use the investment to expand its centers into Texas, Tennessee, New York and other states, Ben Quirk, chief strategy officer at CareMax, said in a statement to Commercial Observer.
Three initial facilities have plans to open in 2022: a 8,000-square-foot spot at 651 River Avenue in the Bronx Terminal Market; a 5,000-square-foot outpost at 17-31 Seagirt Boulevard in Ocean Park Apartments in Far Rockaway, Queens; and a 27,000-square-foot spot on 1915 3rd Avenue in East Harlem, Quirk said. The leases are long term, though Quirk would not comment further on the terms.
The Miami health care company, founded in 2011, plans to open a total of 75 new centers in the next three years. Its residents pay monthly subscriptions through Medicaid and Medicare for health care, rather than fees based on individual office, clinic and hospital visits, per WSJ.
Related Companies, which got its start as an affordable housing developer after its founding in 1972, pointed to a growing need to serve affordable housing residents, who tend to age where they are rather than move, according to WSJ. The landlord, which owns 60,000 affordable housing units in 24 states, views health centers as a source of demand for flagging downtown retail spaces.
“Together with Related we saw that there is a profound nationwide need for medical and social care within and convenient to affordable housing communities,” Carlos de Solo, president and CEO of CareMax, said in a statement. “We engaged Related as our real estate advisors to assist us in locating our de novo medical centers directly within and near to these affordable senior communities nationwide.”
Update: This story has been updated with more details about CareMax’s upcoming New York City locations.
Celia Young can be reached at cyoung@commercialobserver.com.
