Medical Campus In Highlands Ranch Colorado Sells For $33.5 Million

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A sought-after three-building medical office campus in the heart of Highlands Ranch sold for $33.5 million to a real estate investment trust specializing in medical office properties.

Healthcare Realty, under the name Ridgeline Medical LLC, according to public records, purchased the Ridgeline Medical Campus at 9135, 9137 and 9139 S. Ridgeline Blvd. It was sold by Bancroft Capital, which paid $21.25 million for the campus in 2016.

Comprising 136,994 square feet, Ridgeline was 93% leased to tenants, including Children’s Hospital Colorado, Centura Health and Kaiser Permanente.

The campus is located near the UCHealth Highlands Ranch Hospital, which opened in June 2019, and Children’s Hospital Colorado South Campus, Highlands Ranch, which opened in January 2014. As well, Ridgeline is located adjacent to the Highlands Ranch Town Center, which offers a variety of retail amenities.

Constructed in 2001 as a suburban office park, the buildings were converted to medical office to meet the demand for the product type in the market and is one of the few outpatient medical office campus locations near the two hospitals in Highlands Ranch.

Ridgegate Medical Campus’ on-site amenities include a fitness center, showers and lockers, outdoor seating and a conference room.

CBRE’s Chris Bodnar, Lee Asher, Ryan Lindsley, Tim Richey and Charley Will represented the seller.

“The deal received a significant amount of interest from medical office investors across the country who saw the opportunity for full medical conversion at higher rents, as well as the three anchor tenants,” said Bodnar.

The buyer was able to close within a week of signing the purchase and sale agreement, all cash.

Bancroft, a privately held real estate investment firm based in Manhattan Beach, California, also owns Highland Ranch I & II, a two-building, 152,208-sf office complex at 630 and 640 Plaza Drive, as well as Sixth Avenue West, Denver Highlands and a number of other Colorado assets.

Ridgegate represents the latest addition to Healthcare Realty’s Denver area portfolio, which at year-end totaled 651,237 sf.

 

Source: Colorado Real Estate Journal

New Multi-Tenant, On-Campus Medical Office Building Breaks Ground In Cedar Park, Texas

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MedCore Partners, a national healthcare real estate development and brokerage firm headquartered in Dallas, TX, just announced the groundbreaking of its latest development, “Hill Country Medical Plaza.”

Hill County Medical Plaza

Located at the entrance of Cedar Park Regional Medical Center at Medical Parkway and C-bar Ranch Trail in Cedar Park, Texas, this state-of-the-art, two-story, 29,600 square foot Class A medical office building (MOB) will house complementary services to those offered next door in the 93-bed hospital.

Thus far the project is already 77% pre-leased to tenants including Texas Digestive Disease Consultants, Hill Country Endoscopy Center, and a compounding pharmacy. This mix of specialties will work to create an extensive network of referrals and increased convenience for patients in this market.

Designed by Felder Group Architects, the project is scheduled to be completed in October of 2020 and is being built by IE2 Construction, Inc.  MedCore Partners is a full-service real estate company catering exclusively to the healthcare industry.

 

Source: yahoo! finance

Tips For Physician Real Estate Owners During The COVID-19 Pandemic

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In the midst of the worldwide epidemic caused by COVID-19, many medical real estate owners have been struck with requests from tenants they no longer control to defer rent for April.

This can be alarming for physician real estate owners as it’s uncertain when elective procedures and non-essential medical services will resume. Will a tenant ask to defer rent in May also? June? These landlords aren’t always seasoned investors; they’re physicians who are feeling pressure from large, sophisticated business entities – all the while, they have mortgages and overhead to cover.

As a real estate owner who no longer has control of your tenant, it’s important to understand that you have only a few opportunities to exit your real estate investment.  In order to sell at a premium, you need desirable lease terms. These include market rents, a long term (10+ years) NNN (“triple-net”) lease, attractive rental escalations, and other more nuanced details that can make or break your lease.  Many physician landlords have a non-salable property because of the length of their lease term; few investors would pay a premium for real estate that has the potential for inconsistent cashflow, even in our thriving metroplex.

Just as you’re not inclined to defer your tenant’s rent, your tenant is typically not inclined to make changes to their lease. While there are few occasions in a landlord-tenant relationship where the lease can be re-negotiated, COVID-19 seems to have opened a window of opportunity. Whether your long-term objective is to hold or sell  your real estate, there are solutions that benefit both parties.

As an example, many leases feature renewal options that provide the tenant short, 5-year increments by which they can extend their lease. As mentioned earlier, if a lease has fewer than 10 years of remaining term, it will be challenging to achieve a premium value in a sale.  If your tenant requested you defer their rent, you could counter that they exercise one of these renewal options in exchange.

For a health system or management services organization who has invested in the business and facility for the long-term, this should not be an issue. At the same time, this adds significant value to you as the landlord because your facility now has a longer lease term. Not only does your real estate now have more security and liquidity, but it can also be sold at a premium value.  Most importantly, you created a solution that is mutually beneficial to you and your tenant during these challenging times.

The uncertainty from COVID-19 can be daunting for physician real estate owners who depend on rental payments from their management partner. Fortunately, there are creative solutions that facilitate collaboration and continuity of operations until our community regains a sense of normalcy.

 

Source: D Magazine