Denver Ranks As The Ninth Largest Medical Office Market In The U.S.

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Using information provided by CRE research and listing platform CommercialEdge, 42Floors looked at the 25 biggest industrial real estate markets and analyzed the last decade of medical office building construction activity — between 2012 and 2021 — to see how this asset class had blossomed into the spotlight for CRE investment firms.

Denver ranked as the 9th largest medical office market in the U.S.

Report Highlights:

• Denver ranks as the 9th largest medical office market in the U.S., with an inventory of 292 buildings, totaling 19.7 million square feet.

• 2.4 million square feet of medical office space were added to the market in Denver over the last 10 years, representing a 14% growth compared to 2012.

• In 2021, Denver logged the 3rd-largest completion of the year, with the 293,000-square-foot Denver Health – Outpatient Medical Center.

• Overall, the top 25 medical office space markets in the U.S. grew 13% since 2012, adding more than 52.7 million square feet.

Click here to read the full report.

 

Source: Mile High CRE

Nuveen Global Cities REIT Acquires Another $300M Worth Of Medical Office Buildings

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Nuveen Global Cities REIT is doubling down on recession-resistant real estate with the $300M acquisition of 10 healthcare facilities.

The 661K SF portfolio covers medical office buildings in four high-growth markets — Dallas, Pittsburgh, Tampa and Atlanta, per a filing with the Securities and Exchange Commission. More than 65K SF of new or renewed leases have been signed since May, signaling strong demand despite a downturn in the economy.

“These buildings are leased to best-in-class healthcare providers that are significantly invested in their space, with nine of the ten assets featuring tenants with imaging, surgical and/or oncology build-outs,” co-President and Lead Portfolio Manager of GCREIT Richard Kimble said in a statement.

The assets were 96% leased at the time of acquisition and are either newly constructed or newly renovated, according to the filing. Lease terms are on average 5.7 years and include a 2.5% annual bump in rent. More than 20% of the REIT’s investments and 1.2M SF of its portfolio are now concentrated in healthcare, per the filing. Earlier this year, CBRE predicted that about $25B worth of capital would flow into the sector this year, much higher than the nearly $16B invested in 2021.

That estimation may prove slightly off given the dip in activity seen at the midpoint of this year. Transaction volume in Q2 landed at about $2.9B, down from the $3.3B seen in the second quarter of last year, according to Commercial Property Executive. During the same period, though, average rents increased 20% to $356 per SF year-over-year.

“Medical office investment remains highly desirable as the underlying market dynamics for leasing and resale remain strong,” Zacuto Group Managing Director Jake Zacuto told Commercial Property Executive. “Medical tenants overall have very low default risk and tend to offer stability even during uncertain times.”

GCREIT is not alone in its strategy to invest in safe haven assets. In late August, CBRE Investment Management announced it would acquire a 282.6K SF, four-building MOB portfolio in Orange County, California, via a joint venture with Healthcare Realty Trust, according to GlobeSt.

Earlier, LTC Properties Inc., a California-based REIT, announced it would sink $62M into a joint venture to acquire three skilled nursing centers in northern Florida, per The Bakersfield Californian.

Source: Bisnow

Dallas Medical District Towers Up For Grabs

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One of the largest office tower complexes in Dallas’ medical district near Love Field have just been put up for sale.

The 12-story Mockingbird Towers are at 1341 W. Mockingbird Lane.

Built in the 1970s, the almost 450,000-square-foot high-rise project has been substantially renovated with almost $11 million in upgrades since 2015.

The mirrored glass-clad towers are 91% leased to tenants including Labcorp, Children’s Medical, Parkland Community Health Plan, JetSuite and Surveying and Mapping LLC.

Since 2020 the buildings have been owned by Boston-based Albany Road Real Estate Partners.

Commercial property firm Newmark Group is now marketing Mockingbird Towers for sale.

The real estate broker describes the buildings as: “The finest office asset within the booming West Love/Medical District submarket of Dallas.”

Mockingbird Towers are coming to the market at a time when multiple nearby office buildings have recently changed hands.

Seller Albany Road Real Estate recently acquired two additional nearby office towers, And other buildings in the Stemmons Freeway corridor have sold to firms that are repositioning the properties for medical use.

Newmark Group’s Chris Murphy, Robert Hill, Gary Carr and Chase Tagen are marketing Mockingbird Towers to buyers.

 

Source: Dallas Morning News