Medical Office Portfolio Sale Tops $127M

NEW YORK CITY-The Dolgin family and another prominent local real estate family have jointly acquired an 800,857-sf portfolio of 17 medical office buildings in eight states from publicly traded Health Care Property Investors of Newport Beach, CA. The portfolio is 97% occupied. The purchase price was $127.5 million.Kalmon Dolgin tells GlobeSt.com that the properties were being marketed as two separate portfolios, one comprised of mostly larger properties in the northeastern US and another comprised largely of smaller properties in the Southeast. Each portfolio had attracted interest from different types of buyers, but the two family joint venture (Kadima Medical Properties) cut in to the front of the line by offering to buy both portfolios.”By happenstance, we had familiarity with a number of the markets in the eight states in which these properties were located and felt we had the flexibility and speed and hands-on management capacity to acquire both properties and make it greater than the sum of its parts,” says Dolgin. The Dolgin family business, Kalmon Dolgin Affiliates, is a 100-year-old, Brooklyn-based real estate firm that is an owner, manager, sales and leasing broker and appraiser. The company’s specialty is industrial and low-rise commercial properties in the New York region, primarily Long Island. Kalmon Dolgin declined to reveal the name of the other family involved in the purchase, saying they wished to remain anonymous.The medical office properties are located in New York, New Jersey, Massachusetts, Colorado, North Dakota, Florida, Kentucky and Tennessee. The assets range in size from 15,000 sf to 150,000 sf. The trophies of the bunch include 4545-4555 Emerson in Jacksonville, FL, and the Harvard Vanguard Medical building at 20-40 Holland St. in the Davis Square section of Somerville, MA.Kalmon Dolgin tells GlobeSt.com the company and the partnership is now in the process of determining whether it will flip some of the properties individually. “We are still analyzing where we are going and what we intend to do with it,” says Dolgin. “We would consider selling the smaller, farther flung properties, if any.”Dolgin says the two families’ new medical office entity is actively pursuing future acquisitions because the healthcare segment of the nation’s office market offers attractive growth potential due to the expanding size of the population in general and the increased longevity of that population. “Doctors invest heavily in their office infrastructure, and they tend to draw their client and patient base from their immediate surroundings,” says Dolgin. “The two factors combine to make a very low turnover rate in our buildings. In general, it’s difficult for doctors to move their practices.”