Harrison, Montecito Form Medical Office JV

CHICAGO-Harrison Street Real Estate Capital, based here, and Montecito Medical Investment Co., based in Santa Barbara, CA, have formed a joint venture to acquire a portfolio of medical office properties. The venture plans to acquire and develop a portfolio with a value of more than $500 million in a two-to-three year period, says Christopher Merrill, co-founder and managing director of Harrison. The joint venture has acquired the first two properties for its portfolio in Hilo, HI and Rockwall, TX.

Rockwall Medical Office Building, 1005 W. Ralph Hall Pkwy., is an 85,117-sf building constructed in 2006. Houston-based PM Realty developed the building in partnership with Quorum Equities Group LLC of Dallas as part of its 40-acre Horizon Ridge Park, as previously reported by GlobeSt.com. The medical office building is 85% leased with 20% of the building occupied by Lake Pointe Medical Center. The asking lease rate for the building is $26.50 per sf, says Michael Gordon, AVP of acquisitions of Harrison. The building is adjacent to the Presbyterian Hospital of Rockwall, an 80-bed facility which is expected to open later this year.

The Hilo Medical Building, 45 Mohouli St., is a 22,751-sf building built in 1996. Hawaii Health System Corp. has a lease for the entire building through June 30, 2017, Gordon says. Hawaii Health Systems Corp. signed a 10-year, $8-million lease for the medical building space to expand its outpatient facilities, as previously reported by GlobeSt.com. PM Realty had represented then landlord Glacs LLC, in the lease transaction. The average asking lease rate for medical office space in the area is $32.50 per sf triple net, Gordon says. The building is less than one mile from Hilo University Campus. The building reportedly had an asking price of nearly $11.5 million. Glacs had acquired the building in 2004 for $6 million, sources say.