Unico Picks Up Second Medical Office Property

EDMONDS, WA-Unico Properties acquired its second medical office property this week in Stevens Pavilion, a 74,000-sf class A building on the Stevens Hospital campus that is fully leased to about 10 tenants. The three-year-old building sits on a long-term ground lease from Stevens Hospital. Unico paid an entity of Teutsch Partners $18 million for the building. There was an additional payment to Stevens Hospital that has not been disclosed. Stevens Hospital held an option to purchase the building from Teutsch and now has an option to purchase it from Unico in 2015. “This was one of the more complex deals,” Unico’s VP of investments Jonas Sylvester tells GlobeSt.com.The largest tenants in the building are Stevens Hospital, Puget Sound Neurology and a cardiology group affiliated with Swedish Health Services. None of the leases in the building roll for another nine years, and some don’t roll for 14 years, says Sylvester.Paul Carr and Steve Perovich of CBRE’s Health Care Properties division exclusively represent Unico in medical office acquisitions. Sylvester and company landed Unico’s first medical office property in January, paying $10.8 million for a 64,000-sf, multi-tenant mid-rise on MultiCare Health System’s Allenmore Hospital campus in Tacoma. The Allenmore Building B, as it is known, sits on six acres, which will allow Unico to develop an additional 40,000-sf building on the site; the building has been preleased in part by MultiCare and is slated for completion in early 2007.The medical office acquisitions are part of Unico’s plan to diversify its property portfolio, which is currently weighted toward Downtown class A office properties. To gather cash for the diversification effort, Unico last year lowered its stake in a stable of CBD office buildings from 100% to 25% while maintaining the management contracts. In addition to medical office, the effort includes developing and acquiring multifamily properties as well. Unico’s multifamily specialist Greg Van Patten tells GlobeSt.com the company now has several projects in the development pipeline that would add 600 to 800 units if they were all to pan out. Meanwhile, Unico has not been ignoring the office market. Indeed, last week it achieved its goal of owning more than just the US Bancorp Tower in the Portland, OR market–albeit the largest office building in the city–by acquiring an eight-story, 255,000-sf, class B office building that sits next to its 1.1-million-sf flagship there. In partnership with Broadreach Capital Partners of Menlo Park, CA, its partner in US Bancorp Tower, Unico paid Qwest Corp. $11.25 million, or $44.11 per sf, for the building. The discounted rate was in part due to high vacancy. When they put it under contract, the building was only about 34% leased, with Qwest’s 10-year, 85,000-sf leaseback accounting for all but a fraction of that percentage. While the purchase and sale agreement was being negotiated, however, general manager Brian Pearce of Unico landed a 99,478-sf, 10-year lease with Multnomah County that dropped vacancy in the building from about 65% to about 25%. “We were prepared to buy this even without the county’s lease,” Pearce told GlobeSt.com last week, “but this is the kind of outcome every investor hopes for.”