Stockdale Capital Trades 2 MOBs for $156M
Harrison Street acquired the 107,000-square-foot portfolio within two months of selling 35 other medical properties for a combined $815 million.Better Financing Starts with More Options$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get Quotes
9090 Wilshire Blvd. Image courtesy of Stockdale Capital Partners.
Chicago-based Harrison Street has paid $156 million for a pair of medical office buildings in the Los Angeles metro. Stockdale Capital Group, the seller, had acquired the two properties in two separate transactions totaling $88.8 million in late 2015, public records show. The assets total 107,000 square feet.
The largest building is located at 2825 Santa Monica Blvd. in Santa Monica. The three-story, 55,000-square-foot property is primarily occupied by UCLA Health, according to Commercial Observer. The second asset, the 49,000-square-foot 9090 Wilshire Blvd. in Hollywood, is leased by nonprofit academic healthcare organization Cedars-Sinai.
Angie Weber with CBRE, which had handled leasing activity for both properties, noted that the portfolio benefits from a strong location in a market impacted by a medical office moratorium enacted more than a decade ago. As a result, a dearth of new supply has constrained vacancy, pushing rents to all-time highs.
Increasing MOB Activity
This transaction comes less than two months after Harrison Street’s $215 million disposition of a eight-property, 380,000-square-foot portfolio in Los Angeles and the Bay Area, Commercial Property Executive reported in March.
Further, in April, the alternative asset investor traded 27 properties to NorthWest Healthcare Properties for a staggering $600 million. That portfolio included 1.2 million square feet of medical office buildings, specialty hospitals, rehabilitation centers, and more located across 10 states.
What are the benefits of investing in medical office buildings?
Investing in medical office buildings can offer investors stable, sizeable returns owing to a strong, largely recession-proof tenant base, low vacancies, and increasing demand for outpatient services as retired populations grow. Additionally, medical office buildings located on or near to a major hospital campus or in markets characterized by a higher-than-average median age offer significant investment upsides.Source
What are the risks associated with investing in medical office buildings?
Investing in medical office buildings can come with a few risks. These include:
- The location of the property may not be ideal for the type of medical office building, leading to lower occupancy rates.
- The tenant base may be more volatile than other commercial real estate sectors, as medical practices can come and go quickly.
- The cost of construction and renovation can be higher than other commercial real estate sectors, due to the specialized nature of medical office buildings.
It is important to do your due diligence when investing in medical office buildings to ensure that you are making a sound investment. You may want to consider working with a commercial real estate financing advisor to help you evaluate the risks and potential returns of your investment.
What are the advantages of Stockdale Capital's approach to medical office building investments?
Stockdale Capital offers a comprehensive approach to medical office building investments. Our team of experienced professionals provides a full suite of services, including acquisition, financing, asset management, and disposition. We specialize in providing customized solutions to meet the needs of our clients, including:
- Access to capital: We offer a variety of loan products, including bridge loans, permanent loans, and mezzanine financing, to meet the needs of our clients.
- Asset management: Our team of experienced professionals provides comprehensive asset management services, including tenant relations, lease administration, and property management.
- Disposition: We provide a full range of services to assist our clients in the sale of their medical office building investments.
At Stockdale Capital, we strive to provide our clients with the best possible service and the most competitive terms. We are committed to helping our clients achieve their investment goals.
What strategies does Stockdale Capital use to maximize returns on medical office building investments?
Stockdale Capital uses a variety of strategies to maximize returns on medical office building investments. These include focusing on properties located near major hospital campuses or retirement communities, as well as leveraging financing options such as healthcare loans to maximize returns. Additionally, Stockdale Capital looks for properties with strong tenant demand and favorable lease terms, as well as those with potential for value-add opportunities.
How does Stockdale Capital's approach to medical office building investments compare to other investors?
At Stockdale Capital, we take a comprehensive approach to medical office building investments. We focus on the long-term value of the asset, and look for properties that are located in areas with a high median age, near major hospital campuses, and in markets with low vacancy rates. We also offer flexible loan products tailored to the needs of medical office building investors, including bridge loans, mezzanine loans, and permanent financing.
Our loan products are designed to provide investors with the capital they need to acquire and improve medical office buildings. We offer competitive rates and terms, and our experienced team of advisors can help you find the right loan product for your needs. To learn more about our loan products, please visit our website.