Encouraging Signs For MOB Development

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Since the onset of the COVID-19 pandemic, most health systems have been forced to put most their efforts into surviving the crisis, leaving little time to think about growing their ambulatory networks and initiating new medical office building (MOB) development projects.

In recent weeks, however, with the opening up of non-elective surgeries in most states, there are reports that this could be changing.

According to Ben Ochs, CEO and managing partner of one of the healthcare real estate (HRE) sector’s most-active development firms in recent years, Media, Pa.-based Anchor Health Properties, requests for proposals (RFPs) from the health systems are starting to resurface.

“Instead of actively pursuing development deals with health systems during the throes of the pandemic and knocking on their doors, Anchor has been, for the most part, waiting for the health systems to be the initiators,” Ochs noted. “That said, we have seen a number of system-sponsored RFPs come out … and I think at last count we’re in the middle of responding to about four, right now, which I think is a very positive sign.”

Mr. Ochs was one of three panelists to take part in a June 10 HRE webinar titled, “State of the Industry: What’s the Outlook for 2020 from an Investment, Development and Leasing/Operations Perspective?”

The two-part online event, sponsored by Atlanta-based InterFace Conference Group, began with a panel discussion on investment. That was followed by a session on development that featured Mr. Ochs, along with Mark Davis of longtime Minneapolis-based HRE development firm Davis, and Chad Henderson of Pensacola, Fla.-based Catalyst Healthcare Real Estate (HRE). HREI™ Publisher Murray W. Wolf moderated the development discussion.

 

Source: HREI

Medical Office Campus In Colorado Springs Sells For $34 Million

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MBRE Healthcare has purchased Union Medical Office Plaza, a three-building, 149,428-square-foot medical office campus in Colorado Springs, Colorado.

RAIT Financial Trust sold the asset for $33.6 million after six years of ownership, according to Yardi Matrix information. JLL Capital Markets represented the seller and procured the buyer.

Located at 1625, 1633 and 1644 Medical Center Point, the two-story buildings came online in 1992, 1995 and 1998. According to JLL, the property was 82 percent leased at the time of sale. The roster includes a mix of medical services tenants spanning sectors such as audiology, cardiology, radiology and urgent care.

The campus is roughly 4 miles northeast of the city center in a premier medical corridor. Situated close to CanAm Highway, the location is also accessible through public transportation. Penrose Hospital is 2 miles southwest.

Managing Directors Andrew Milne and Larry Thiel, together with Director Matt DiCesare and Senior Managing Director Eric Tupler led the JLL team. Milne was part of a team that arranged another MBRE Healthcare purchase in December.

 

Source: Commercial Property Executive

Investors Expect Big Second Half: MOB Buyers Discuss State Of Market During InterFace Webinar

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After the initial shock of the fallout of the COVID-19 pandemic, it looks as if the healthcare industry, and subsequently the healthcare real estate (HRE) sector, is getting back on track.

“We collected 96 percent of our rents (in April), but the providers and our tenants were really scared,” said Chip Conk, CEO and founder of Nashville, Tenn.-based Montecito Medical Real Estate, which has a portfolio of about 3 million square feet of medical office space under management. “They didn’t know anything about what was really going to happen. However, by last week, we have seen from our tenants, I think, a little bit of stabilization in terms of where they are psychologically, and we actually had some requests that got totally paid back. Overall, the sector, at least our tenants, seems to be stable … COVID could come back, but overall we’re feeling a lot better than we were 90 days ago, as a company.”

As a result of such stability in the HRE sector, demand and pricing remain quite strong for medical office buildings (MOBs), according to panelists who took part in a June 10 webinar exploring how the sector is faring during the pandemic.

Sponsored by Atlanta-based Interface Conference Group, part of France Media Inc., the event was titled, “State of the Industry: What’s the Outlook for 2020 from an Investment, Development and Leasing/Operations Perspective?”

In addition to Mr. Conk, the discussion, moderated by Mindy Berman, senior managing director and an MOB sales broker with Jones Lang LaSalle Inc. (NYSE: JLL), also included: Robert Hull, executive VP with Nashville-based Healthcare Realty Trust (NYSE: HR); and Peter Westmeyer, president and managing principal with Chicago-based MBRE Healthcare.

As noted, the strength of the MOB sector amid the fallout from the pandemic has kept the product type on the radar screens of many investors, according to the panelists, whose firms are among those that have remained as active as possible in the market.

 

Source: HREI