ORLANDO-Healthcare Trust of America, a Scottsdale, Ariz.-based real estate investment trust, has acquired a medical office portfolio in Orlando and Oviedo for about $18.3 million. The portfolio includes two class A multi-tenant buildings spanning 105,000 square feet.
Built in 2000, the Lake Underhill Medical Center is located in Orlando on the campus of Florida Hospital East Orlando. The Oviedo Medical Center was built in 1997 and is located in Oviedo, about 10 miles northeast of Orlando. The Oviedo Medical Center is located on a parcel owned by Florida Hospital and is adjacent to Florida Hospital’s CentraCare urgent care center.
"The strategic reason for the transaction is the relationship with Florida Hospital," Mark Engstrom, executive vice president of Acquisitions for Healthcare Trust of America, tells GlobeSt.com. "We found an opportunity to build on that relationship by acquiring this building, which is in a strong demographic market."
The medial office buildings are 98% leased with over 50% of the buildings leased to Florida Hospital, part of Adventist Health System. The system supports 43 hospitals operating over 7,700 licensed beds. Established in 1908, Florida Hospital is the system's flagship hospital with approximately 2,200 beds on seven campuses.
"These medical office buildings were built long enough ago to be stabilized," Charles Lentz, a managing partner at Integra Realty Resources in Orlando, tells GlobeSt.com. "The buildings have a good tenant base. Since the rest of the office market is not in very good shape, these are very appealing investments."
Since January 1, 2010, Healthcare Trust of America has acquired approximately $344.5 million in medical office and healthcare related assets based on acquisition price, including 1.5 million square feet of gross leasable area, which is 98% leased. Engstrom says his firm will continue looking for medical office transactions across the nation.'
"It's getting more competitive for medical office buildings," Engstrom says. "A year ago, there were few buyers and few properties. Now we see cap rates getting much more aggressive. That will cause us to be more selective with our acquisitions going forward."
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