TIAA-CREF, a leading financial services organization with $523 billion in assets under management, and the University of Connecticut Health Center today announced a public-private investment under the Bioscience Connecticut initiative. The investment by TIAA-CREF provides $203 million in long-term financing for UConn Health Center’s new 300,000-square-foot outpatient care building and parking garages at its Farmington campus.
The outpatient care building and parking garages are part of the Bioscience Connecticut initiative, a forward-thinking plan championed by Connecticut Gov. Dannel P. Malloy and approved by the Connecticut General Assembly in 2011. Bioscience Connecticut aims to create construction-related jobs immediately and generate long-term, sustainable economic growth based on bioscience research, innovation, entrepreneurship and commercialization. The UConn Health Center outpatient care building is the only element of Bioscience Connecticut supported by private financing.
“This public-private partnership between the UConn Health Center and TIAA-CREF is a win-win for Connecticut,” Gov. Malloy said. “A state-of-the-art outpatient care facility will allow the health center to better recruit top talent and address the medical needs of the community. This type of investment creates jobs and demonstrates the success of the Bioscience Connecticut initiative.”
The new building will allow UConn Health Center to enhance its medical practices and clinical programs to continue to improve the services available to patients and their families. It will bring together outpatient services currently located in multiple buildings under one roof, provide a modern space for patient services and foster innovative new collaborations among center staff.
“By securing customized, long-term financing for the outpatient care building with TIAA-CREF, we are able to maximize the university’s time, money and personnel resources versus seeking other financing options,” said Jeffrey Geoghegan, controller, UConn Health Center. “We are excited by the significant growth opportunities the new outpatient care building will afford the university.”
“We are very excited about the opportunities that the new outpatient care building will afford our faculty practices and clinician-researchers,” noted Dr. Frank M. Torti, executive vice president for health affairs, UConn Health Center, and dean, UConn Medical School. “The building will enable us to transform our medical practices and clinical programs so that we can provide the best possible quality and service to patients and their families for many years to come.”
TIAA-CREF’s financing is structured as a credit tenant loan. A credit tenant loan is a method of financing real estate in which the property owner borrows money to finance the construction and ongoing ownership of the building and uses a percentage of future rent to repay the loan.
“We believe that public-private investments with financially strong, stable institutions like the UConn Health Center are mutually beneficial. They support our clients’ financial well-being and strengthen their local communities through job growth and increased revenues,” said Robert Leary, executive vice president, TIAA-CREF, and president, TIAA-CREF Asset Management. “With this investment, we are truly advancing the long-term interests of our clients and the state of Connecticut while fulfilling our own mission to support the financial strength of nonprofit institutions and employees.”
TIAA-CREF is committed to driving improvements on behalf of community-based health care providers, with approximately $4 billion in investments in universities and health care institutions in its clients’ communities. These investments are part of TIAA-CREF’s broader investment strategy in credit and real estate, and leverage the company’s deep experience in these markets dating back to 1918 and 1934, respectively.
Construction on the outpatient care building and parking garages began in January 2013. The outpatient care building is scheduled to open to the public in January 2015.