"I like the building because there's upside in the leasing," says Steve Allison, Ashforth Paradigm Capital Advisors' chief investment officer. "And, in my estimation, it's the nicest medical office building in the market. It's well positioned and is poised to do well." He tells GlobeSt.com that Dallas-based Cirrus Group turned to the partnership to pick up the deal after a contract fell out for the 85,471-sf, class A medical office building.
The four-story structure, built in 1999-2000, is 77% occupied by 19 medical groups, including lab services and on-site pharmacy. Major tenants include Medical Plaza Surgical Center, a 13,116-sf outpatient surgical center that recently signed a 10-year lease; Texas Orthopedic & Aquatic Therapy Institute, a full-service physical medicine and rehab facility taking up 7,048 sf; and North I-45 Open MRI and Diagnostic Center LLP, an imaging and diagnostic facility occupying 5,889 sf.
Ashforth Paradigm hired Colliers International's local brokers to lease the building. Paradigm Properties will team with locally based Caldwell Watson to manage it.
According to the Harris County Appraisal District, the building is valued at roughly $8 million. It fronts Interstate 45 and is located three miles north of Loop 610. William Forrest, president of locally based Revac Inc., says comparable buildings in the area are fetching $5.5 million to $6 million.
The partnership, planning to acquire about $100 million of real estate in 2005, financed the medical office building's purchase with a loan from Deutsche Bank. The Houston deal is the group's second tenants-in-common purchase since it launched earlier in the year. In September, the partnership acquired 212 Elm St., a 65,475-sf office and retail building in Somerville, MA.
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