GlobeSt.com UPDATE: Swedish Sells Medical Office Space for $111M

SEATTLE-Publicly traded Health Care Property Investors Inc. of Long Beach, CA, has acquired 481,000-sf of medical office and retail space and 2,000 parking spaces here from locally based Swedish Medical Center. The purchase price was $111 million.The medical office REIT’s purchase includes 100% ownership of three medical office buildings, a 42% condominium interest in a fourth medical office building and two parking structures, one with street-level retail. Swedish retains ownership of the ground beneath all five properties and has a right of first refusal to repurchase the buildings if HCP ever elects to sell. The acquired properties include the 1101 Madison medical office building, retail space and parking garage; the Arnold Pavilion (9th floor and above), located at 1221 Madison; the 600 Broadway medical office building and parking garage; the Madison Garage and retail space on Madison St. between Summit and Boylston Aves.; and the Ballard Medical Plaza at 1801 N.W. Market. Swedish Medical Center occupies 20 percent of the rentable sf and the properties are currently 96% occupied, according to the announcement. A Health Care Property Investors executive declind comment on its expected return on investment.HCPI has invested in 180 medical office buildings in 22 states, either directly or through joint ventures. The company’s overall property investment portfolio includes 536 properties in 43 states. In addition to medical office buildings, the company owns 29 hospitals, 179 long-term care facilities, 124 assisted living and continuing care retirement communities and 24 other health care facilities.Swedish Medical Center has three hospital campuses with 1,245 licensed beds, nearly 2,000 physicians and approximately 7,000 employees. The not-for-profit health system’s decision to liquidate real estate assets was driven by its desire to enhance clinical programs, acquire new medical technology, replace older buildings and equipment, and expand further into East King County.A Swedish executive was not immediately available for comment Tuesday morning. When the property hit the market in April, Swedish CFO Ron Sperling told GlobeSt.com that having so much resource tied up in medical office buildings “no longer makes the most sense for us. We believe the capital from the sale of these buildings could be better used… .” (For the previous story, click here )In September, Swedish launched an $18-million effort to turn a 55,225-sf office building in Issaquah, WA, into the state’s first stand-alone emergency room. Earlier this year, Swedish inked a 20-year, $20-million lease for the state-owned building located at 2005 N.W. Sammamish Rd., across from the entrance to Lake Sammamish State Park and visible from Interstate 90. Swedish also is hoping to construct a full-fledged hospital in Issaquah in the next several years. In June, it submitted the necessary Certificate of Need application with the state Department of Health for a $197-million, 175-bed hospital on a 15-acre lot located in Port Blakely Communities’ Issaquah Highlands master planned community.