WALNUT CREEK, CA–A medical office building portfolio comprised of 20 radiation oncology centers located in Florida, California, Nevada, West Virginia and Kentucky has sold with a price of slightly more than $117 million. The total square footage of the healthcare property portfolio is 224,150 square feet or approximately $522 per square foot.
Marcus & Millichap associate vice presidents, Gino Lollio and Scott Niedergang, represented the seller, a group of physicians affiliated with the tenant, and the buyer, a private non-traded REIT with a focus on healthcare. The net-leased tenant is 21st Century Oncology, which executed a new master lease prior to close of the transaction.
“We were able to match an active, assertive institutional healthcare buyer with a seller who had built a valuable, high quality portfolio over a number of years,” Lollio says. “The seller achieved a competitive price and the buyer attained a dominant healthcare tenant occupying high-quality sites strategically located in key markets.”
Of those key markets, there are 12 properties located in Florida, four properties in California and two properties in Nevada, along with one each in West Virginia and Kentucky.
Niedergang tells GlobeSt.com: “One of the driving forces behind this disposition was the continued improvement of the tenant's credit and financials as the transaction progressed. Additional factors motiving the buyer include the strong real estate fundamentals of the portfolio and 21st Century Oncology's status as the largest provider of integrated cancer care services.”
21st Century Oncology provides cancer care services and is the largest radiation oncology provider with the largest groups of urologists in the country. The physician-led company is headquartered in Fort Myers, FL and operates 181 treatment centers, including 145 centers located in 16 US states and 36 centers in Latin America. The global company is expanding with additional partnerships being announced on a regular basis.
“Our sole focus and specialization on healthcare real estate investment sales added value to the seller and helped them capitalize on historically aggressive prices currently being paid for assets like the ones in this portfolio,” says Lollio. “The acquisition offers long-term stable cash flow with rental growth throughout the lease term.”
Lollio and Niedergang are based out of the firm's downtown Chicago office. Marcus & Millichap's brokers of record in the transaction are Kirk Felici, first vice president and regional manager, Miami; Kevin Boeve, regional manager, Ontario, CA; Perry White, vice president investments, Las Vegas; Aaron Johnson, vice president investments, Louisville, KY; and Brenton Baskin, regional manager, broker of record in West Virginia.
“Interest in medical office investment has expanded significantly as the asset class has moved into a mainstream classification,” says Alan L. Pontius, national director, Marcus & Millichap commercial property groups, based in San Francisco. “Over the past several years a broadening base of investors has poured into the sector. Rather than being viewed as a niche specialty within the landscape of real estate investment, medical office is highly sought after by investors attracted to favorable demographic trends and a property type recognized for stable returns and lower risk characteristics.”
Marcus & Millichap is a commercial real estate investment services firm with offices in the United States and Canada.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
