Lincoln, PGIM Acquire 52,410-SF Texas Medical Office Building

Lincoln Property Company, in partnership with PGIM, has acquired SOBO Medical Building, a 52,410-square-foot outpatient medical office building and surgery center in Boerne, Texas, expanding the partnership’s healthcare real estate holdings in the state.

The three-story Class A property is located at 112 Herff Road, approximately 30 miles northwest of San Antonio. Built in 2019, the building was approximately 93% leased at the time of the acquisition.

Its tenant roster includes Baptist Health System and Surgery Center of Boerne, along with providers offering primary care, ambulatory surgery, orthopedics, pain management, physical therapy, mammography, gastroenterology, diagnostic imaging and clinical research.

Lincoln said the acquisition fits its strategy of investing in high-quality healthcare properties in growing markets. Boerne has experienced substantial population growth in recent years, increasing demand for outpatient medical services closer to where patients live.

The property’s ambulatory surgery component adds another layer of investment appeal. Surgery centers and other specialized outpatient facilities typically require significant tenant improvements and medical infrastructure, which can make them more difficult and costly to relocate than conventional office users.

CBRE represented the seller in the transaction and also arranged acquisition financing on behalf of Lincoln. The seller, purchase price and financing terms were not disclosed.

The acquisition also places Lincoln and PGIM in a market where Baptist Health System has been expanding its broader healthcare footprint.

Baptist previously announced plans for an acute-care hospital campus near Interstate 10 and State Highway 46 in Boerne, adding to the system’s existing surgery center, physician practices and outpatient services in the community.

For medical office investors, SOBO Medical Building combines several characteristics that continue to attract institutional capital: relatively new construction, high occupancy, health-system tenancy, ambulatory surgery and a location in a rapidly growing suburban market.

The transaction also reflects the broader shift in healthcare delivery toward outpatient settings. As health systems and physician groups move more procedures and specialty services away from traditional hospital campuses, well-located medical office buildings that can accommodate multiple clinical uses have become increasingly important pieces of healthcare real estate infrastructure.

For Lincoln and PGIM, the Boerne acquisition adds another stabilized outpatient asset to a growing Texas healthcare portfolio while providing exposure to continued healthcare expansion in the San Antonio region.

Source: Lincoln Property Company