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MLL Capital Expands Medical Office Portfolio With Four Acquisitions

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MLL Capital, a Boston-based commercial real estate investor focused on medical office, laboratory and life sciences properties across the US, announced today the recent acquisition of four medical office buildings, totaling 251,546 square feet during December of 2019.

The properties are located in Chicago, Minneapolis/St Paul, Washington D.C. and Nashville markets.

“These acquisitions align with our strategy to build a portfolio focusing on opportunistic and value-add investments in this sector and repositioning them to attract and retain high-quality medical tenants,” said Wyndsor DePetro, an MLL Capital Principal. “The assets, which are currently 81% occupied, present the opportunity to lease up to stabilized occupancy levels by attracting and retaining a diverse mix of high-quality medical office tenants with a targeted leasing effort using attractive lease packages and capital improvement plans.”

The acquisitions include:

— The 95,043 square foot Advocate Sherman medical office building located on the campus of the Advocate Sherman Hospital in Elgin, IL, part of the Chicago market

— 28 White Bridge Road, a 60,540 square foot medical office building located near the 498-bed St. Thomas West Hospital in Nashville, TN

— 46440 Benedict Drive, a 35,405 square foot medical office building in Sterling, VA, a submarket of Washington D.C.

— The 60,558 square foot High Pointe Health Campus located in Lake Elmo, MN in the Minneapolis/St. Paul market.

“These are well-located medical properties that present an opportunity to create premier, on- and off-campus, multi-tenant healthcare properties,” said Kyle O’Connor, MLL Capital President and Founder. “There continues to be strong interest from investors in value-add medical office, laboratory and life sciences properties, which offer some of the best risk adjusted returns in the market today given the underlying demand fundamentals and downside protection. These recent acquisitions have us on track to reach our goal of building a $500 million portfolio of institutional-quality assets in this sector.”

 

Source: HREI

Montecito Medical Buys 221 KSF Nashville-Area Medical Office Building

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Montecito Medical Real Estate has recently expanded its Nashville-area footprint with the acquisition of Murfreesboro Medical Properties LLC, the ownership group of a 221,000-square-foot medical office building in Murfreesboro, Tenn.

Murfreesboro Medical Clinic occupied the entire property. Located at 1272 Garrison Drive, the MOB opened as a 78,000-square-foot facility in 2008 and underwent an expansion in 2013 through a build-to-suit second phase that enhanced the property by 143,000 square feet. In addition to clinic space, the trophy asset houses an ambulatory surgery center with four operating rooms.

“We review over $1.3 billion in assets each month and typically pursue only the top five percent that meet our investment criteria,” Joellyn Shannon, a vice president with Montecito Medical Real Estate, told Commercial Property Executive. “We prefer newer, larger assets that are occupied by dominant physician groups or strong health systems with long-term leases and we will pay-up for these attributes, so the seller will make more money, too.”

The physician leaders of MMC, who had been fielding unsolicited offers for the three-story building since construction of the first phase kicked off in 2007, will not only remain tenants in the building, but they’ll also retain an ownership position as a result of their reinvestment in the entity acquiring the asset.

Bolstering A Premier Portfolio

The Murfreesboro MOB marks one of a handful of purchases Montecito has completed in 2019. The company kicked off 2019 with the acquisition of a 110,000-square-foot medical office complex in Clarksville, just outside Nashville. The company’s other purchases this year include a 30,500-square-foot MOB and surgery center in Bedford, N.H., roughly 50 miles north of Boston, and a 42,000-square-foot MOB in Greenwood, Ind., near Indianapolis. And there’s more to come. Montecito has access to approximately $1 billion in capital for additional investments.

“While there are certainly challenges aggregating a large medical office building/ambulatory surgery center portfolio, Montecito is extremely active in the market,” Shannon said.

Montecito and Murfreesboro Medical Properties relied on Anthony Lunceford, Joe Massa and Woody Widenhofer of Colliers International for representation in the transaction.

 

Source: Commercial Property Executive