Berkadia Sells 197-Bed SUN Behavioral Health Hospital in Erlanger, Kentucky, for Woodbury Corporation

Berkadia announced Oct. 5 the sale of SUN Behavioral Health, a Class A behavioral health hospital in Erlanger, Kentucky, in the Cincinnati metropolitan area. Eric Lee, Sabrina Solomiany, Vasili Davos and Chris Lashmet of Berkadia Medical & Life Sciences led the transaction on behalf of the seller, Salt Lake City-based Woodbury Corporation.

Berkadia Team Led Sale for Woodbury Corporation

Lee is a managing director at Berkadia, and Solomiany is a senior managing director. Davos and Lashmet are managing directors. All four are with Berkadia Medical & Life Sciences. Berkadia represented Woodbury Corporation, the property's seller, in the disposition.

"SUN Behavioral Health represents a compelling investment in a high-quality behavioral health facility operated by a best-in-class provider," Lee said. "SUN's leading market position, strong operating performance, and significant barriers to entry drove a highly competitive process, attracting a deep pool of bidders ranging from public REITs and institutional healthcare real estate investors to private regional investors. The transaction underscores the growing appetite among traditional healthcare real estate investors for high-quality behavioral health assets."

Property Details: 197-Bed Behavioral Health Hospital

SUN Behavioral Health is located at 820 Dolwick Drive in Erlanger, Kentucky. The facility is a 155,000-square-foot hospital with 197 beds. Constructed in 2018, the purpose-built property sits on a 12.8-acre site and is a two-story facility with eight inpatient units and 104 patient rooms.

The hospital provides a full continuum of inpatient, partial hospitalization and intensive outpatient behavioral health services for children, adolescents, adults and seniors. The property is 100% leased on an absolute net basis to Sun Behavioral Health, a national provider of acute mental health and substance use disorder treatment, and serves as a flagship campus for the operator.

SUN operates in partnership with St. Elizabeth Healthcare, supporting an integrated continuum of care throughout Northern Kentucky. The facility, located about 10 minutes south of Cincinnati, also operates with NorthKey Behavioral Health and assumed 197 psychiatric beds previously associated with the regional care system. St. Elizabeth reported a project cost of approximately $35 million in 2017, before the hospital was completed.

Investor Interest in Behavioral Health Real Estate

The marketing process drew public real estate investment trusts, institutional healthcare real estate investors and private regional investors.

The sale comes as investor attention toward specialty healthcare real estate, including behavioral health and rehabilitation, has been gaining momentum, according to a 2026 healthcare market report. The report said capital markets had stabilized and bid-ask spreads had narrowed, and that investors and lenders were favoring properties with strong utilization, essential tenancy and durable demand drivers. It characterized late-2025 and 2026 conditions as more constructive, with renewed portfolio activity and greater pricing clarity.

Behavioral health hospitals require specialized design, licensing, staffing and clinical partnerships, and in many markets regulatory approval, which makes them difficult to replicate. A 2025 market commentary placed behavioral health facilities in a broad 7.5% to 9.25% capitalization-rate range, generally above traditional medical office and acute care assets because of operator, reimbursement and specialized-use considerations. That range reflects general market conditions and not the pricing of this transaction.

Absolute Net Lease Structure

Under an absolute net lease, the landlord typically receives rent while the tenant bears most property-level operating expenses, maintenance and capital obligations. The structure can make a property resemble a long-duration healthcare net lease investment, although the credit quality and operating performance of the behavioral health provider remain central underwriting considerations.

Berkadia Medical & Life Sciences serves healthcare and life sciences facility owners, operators and developers through mortgage banking and investment sales advisory services.

Sources

Berkadia, "Berkadia Announces the Sale of a Class A Behavioral Health Hospital in Erlanger, Kentucky": https://www.berkadia.com/news/sun-behavioral-health-erlanger-ky-sold-by-berkadia-2026/