Exclusive: Real estate investment trust Carter Validus up for sale - sources

(Reuters) - Carter Validus Mission Critical REIT Inc, a nontraded U.S. real estate investment trust focused on data centers and medical properties, is exploring a sale that could value it at more than $3.5 billion, according to people familiar with the matter.

Unlike publicly traded REITs, nontraded REITs such as Carter Validus require investors to lock up their money. In exchange, they promise a steady stream of cash distributions and, eventually, return of capital in the form of a public listing or a sale.

To cash out its investors, Carter Validus is considering two separate transactions to divest its assets: one for its portfolio of data centers and one for its medical properties, the people said this week.

Carter Validus is looking for buyers for its data center assets, which could fetch more than $1 billion, the people said. It is also reviewing options, including a potential sale, for the remainder of the portfolio, the people added.

The sources cautioned no deal is certain and asked not to be identified because the deliberations are confidential. Carter Validus did not immediately respond to requests for comment.

Based in Tampa, Florida, Carter Validus was launched in 2010 as a vehicle for investors to gain exposure to healthcare and data center properties. Through acquisitions, the company had amassed 49 real estate investments as of the end of September.

In 2015, Carter Validus hired investment bank Goldman Sachs Group Inc GS.N to review strategic alternatives, but subsequently announced, after assessing its options, that it had decided against a sale.

Healthcare real estate has been caught up in the same U.S. post-election tumult that has challenged the wider industry, as lawmakers debate healthcare reforms that could greatly alter many hospitals and medical facilities.

In recent years, data centers have been a source of steady dealmaking activity, as technology companies seek to scale up data operations to keep pace with U.S. businesses’ burgeoning demand for data and video.

Private equity firms or companies that specialize in data centers, such as Equinix Inc EQIX.O and Digital Realty Trust Inc DLR.O, have been active buyers of assets.

Carter Validus was created by a parent company of the same name that also sponsors other REITs. It created Carter Validus Mission Critical REIT II in 2014.

Reporting by Carl O’Donnell and Liana B. Baker in New York; Editing by Matthew Lewis