Chestnut Funds

Chestnut Funds Managing Partner & Founder Steen Watson recently joined investment industry reporter Elana Margulies Snyderman on?EisnerAmper’s Trends Watch?to discuss the outlook for middle market commercial real estate investing. In the interview, Steen shares his perspective on key market trends, where he sees opportunity, and the challenges facing investors today. Discussion highlights include: - Market outlook and expected liquidity shifts in 2025 - Opportunities in value-add middle market assets - Challenges in capital formation and debt financing - How rising costs in healthcare and housing could impact demand Read the full interview here:

Did you set a goal to deepen your real estate knowledge this year? Start with Chestnut Funds' Viewpoints series, where we share valuable insights on the commercial real estate landscape and its intersection with broader economic trends. As leaders in the medical outpatient building (MOB) sector, we closely track the trends and technologies shaping healthcare delivery and demand. Our quarterly reports keep you informed on the key factors driving this growing market. Explore our Viewpoints series today: https://lnkd.in/gXenHg_w

We are pleased to announce Chestnut Healthcare Real Estate has partnered with Fort Street Partners?in a joint venture focused on outpatient healthcare real estate development and acquisitions in Utah. The venture targets core+, value-add, and development opportunities, with initial projects already in development in Syracuse and Eagle Mountain. A special thank you to JLL Capital Markets for their role in arranging this partnership, led by Director CJ Kodani and Managing Director Mark Root. "We are thrilled to partner with Fort Street in the acquisition and development of quality healthcare facilities in the Greater Salt Lake City area. This joint venture represents a strategic goal of Chestnut to develop key relationships in our target markets across the United States,” said Kurt Hutter, Managing Director - Investments of Chestnut Funds. We look forward to leveraging this partnership to achieve results beyond what could be accomplished independently.

Although our team is spread out across Tennessee, Maryland, Pennsylvania, and Connecticut, we are all together (virtually) to send you our warmest wishes. From all of us at Chestnut Funds, we hope you have a happy and peaceful holiday season! Steen Watson David Jonas Kennedy Griffin Courtney Watson Tyler Mastey Hailey Johnston Laura Probasco, CPA Kurt Hutter Jen Politano Lou Sachs

Our latest edition of Viewpoints detials our perspectives on the commercial real estate lending market considering the interest rate environment. Visit the link below to read an excerpt from our Q4 2024 Viewpoints report and details to access the full report.

Last week, Chestnut Funds participated in the 2024 New York Regional Society of Plastic Surgeons (NYRSPS) Annual Meeting in New York City. David Jonas joined healthcare leaders, innovators, and industry experts at the event, hosted by the American Society of Plastic Surgeons (ASPS). The conference provided an opportunity to explore advancements in plastic surgery and discuss the critical role of healthcare infrastructure in supporting the delivery of innovative care across communities. At Chestnut, we're dedicated to investing in institutional-quality healthcare properties that enable strategic, high-quality healthcare services nationwide. With investments in over 100 properties with 6 million square feet of healthcare real estate, our the work we do aligns with the transformative work being done in specialties like plastic surgery and beyond. Thank you to the NYRSPS and Grace Padrón, with ASPS, for organizing such an insightful and collaborative event.

Medical office buildings (MOBs) consistently maintain tenant retention rates, ranging from 77% to 83% (according to Revistamed). This stability translates to reliable income thanks to long lease terms and annual rent increases. This, coupled with their role as community cornerstones serving patients and healthcare professionals, is one factor that sets MOBs apart. Since our founding, Chestnut Funds has invested in over 100 MOBs and we continue that investment activity with another active fund targeting middle-market MOB properties. For more information, visit our website and connect with our team at: www.chestnutfunds.com

Last week, the Chestnut Funds team participated in the 9th Annual Private Wealth Mid-Atlantic Forum, hosted by Markets Group in Philadelphia. David Jonas joined the 'State of the Industry: Real Estate Markets in 2024 and Beyond' panel, alongside Derek Craig, Michael Kondras, and Stu Caplan. The discussion focused on recent shifts in real estate markets and forecasts for the future, highlighting the importance of understanding the structure of investment funds–whether private, interval, or non-traded–and their underlying assets, including various real estate types and infrastructure. We’re grateful for the opportunity to share our insights with the audience! If you’d like to explore how these market dynamics are impacting Medical Outpatient Building (MOB) investments, our team would be happy to connect.

Selectively converting properties into medical outpatient buildings (MOBs) can present opportunities when the right conditions align. While these instances are limited, a thorough evaluation of location, configuration, and building systems is critical to identifying suitable opportunities. At the same time, we’re closely monitoring the value-add segment, where attractive pricing may present opportunities for repositioning. ? Check out the short clip below from our recent webinar to hear these opportunities discussed in greater depth. ? To learn more about how Chestnut Funds is identifying strategies that align with our long-term investment objectives, feel free to reach out or visit our website: www.chestnutfunds.com.

Analyzing current cap rates provides valuable context on pricing trends and sector positioning within the broader commercial real estate market. Currently, Medical Office Building (MOB) cap rates are in the 6.5-7% range but pricing has improved in recent quarters. Effective cap rates as estimated by Green Street take into account expected CapEx over the hold period. What’s notable in the MOB sector is the expected NOI growth rate of 3-3.5%, as reported by Green Street. This combined with an effective cap rate that exceeds other property types reflects the MOB value proposition - consistent and increasing net operating income. For more insights on the MOB sector, connect with us or visit our website: www.chestnutfunds.com.