SCOTTSDALE, ARIZ., AND SKOKIE, ILL. — While this year has been marked by cautiousness on the acquisition side of the real estate industry, this past week showed that healthcare remains a popular property type to purchase. Scottsdale-based REIT Healthcare Trust of America (HTA), which has already had a busy year on the acquisitions front, announced two new purchases. The first is a portfolio of two Class A medical office buildings located in central Florida that traded for approximately $18.3 million. Lake Underhill Medical Center is located on the campus of Florida Hospital East Orlando in Orlando, and Oviedo Medical Center is located 10 miles north of Orlando in Oviedo, adjacent to a Florida Hospital CentraCare urgent care center. The buildings total a combined 105,000 square feet, half of which is leased to Florida Hospital, which also owns the land on which the Oviedo facility is located. Florida Hospital is an affiliate of Adventist Health System.
HTA also acquired a medical office building located near CHRISTUS St. Vincent Regional Medical Center in Santa Fe, N.M., for approximately $9.56 million. Known as St. Vincent 440 MOB, the facility totals 33,631 square feet and is fully leased to CHRISTUS, which has 9 years remaining on its lease. In addition, HTA is under contract to acquire a nearby 20,000-square-foot medical office building known as St. Vincent 1640 MOB. This property is also fully leased to CHRISTUS. Since the beginning of the year, HTA has acquired $344.5 million in medical office and healthcare properties, which equates to 1.5 million square feet of leasable space.
EnTrust Realty Advisors, an affiliate of Skokie-based The Alter Group, has brokered three additional medical office sales. The first property was Wellspring Center, a three-story, 70,327-square-foot property located in Corpus Christi, Texas. The Class A facility is situated at 5802 Saratoga Blvd. on the campus of CHRISTUS Spohn Hospital Corpus Christi – South. The hospital also is the building's anchor tenant and has a 50-year ground lease on the site. Alter+Care, the healthcare affiliate of The Alter Group, developed the site in 2007. The buyer was was an Ohio-based healthcare developer and operator.
The second property is Madison Medical Plaza, a three-story, 70,023-square-foot property located at 301 Madison St., on the campus of Provena St. Joseph Medical Center, in Joliet, Ill. Developed in 2007, the property was 70 percent leased at the time of closing. The seller was Alter+Care, which EnTrust represented, and the buyer was Jupiter, Fla.-based Rendina Cos.
The third, and final, property was San Bernardino Medial Plaza, a two-story, 34,709-square-foot facility located in Rialto, Calif. Constructed in 1993, the building was 93 percent at the time of closing. Its anchor is Brentwood, Tenn.-based Renal Advantage. The seller was Lake Forest, Ill.-based The Westminster Funds, and the buyer was Rancho Santa Margarita, Calif.-based Redwood Real Estate Partners.
The implementation of health care reform legislation earlier this year could produce even more activity in coming years. In prepared remarks, EnTrust Managing Principal James Clark, III, anticipates 30 million additional patients entering the system once reforms begin in 2014, which could create a need for as much as 60 million square feet of new medical office space. However, that estimate could increase even more when natural population growth is also taken into account.
— Coleman Wood