HOUSTON—In another example of the recession-resistance nature of medical office assets, a medical office building has found a new owner. The Texas Children's Hospital medical office building, a 25,000-square-foot class-A multi-tenant medical building, has sold to Healthcare Trust Inc., based in New York. The seller was an affiliate of Stage Equity Partners, a real estate investment firm based in Skokie, IL. Financial terms were not disclosed.
Avison Young principals Mike Wilson, Erik Foster, Jim Kornick and Chip Ryan, members of the firm's national healthcare capital markets group, along with Avison Young principal Darrell Betts in the Houston office, represented the owner.
“Investors continue to focus on well-located medical office assets that are aligned with major healthcare systems,” says Wilson. “This property's strong anchor with Texas Children's as well as its highway frontage and surrounding retail were very attractive drivers.”
The building is 100% occupied by several established medical practices, including Texas Children's Pediatrics, Houston Eye Associates, and the balance by tenants offering pediatric allergy medicine, MRI and radiology and dentistry.
“Hospitals are moving more services off campus and into the communities they serve,” Wilson tells GlobeSt.com. “Facilities that support that dynamic are more attractive to investors.”
The single-story building was built in 2007. It is located at 5650 East Sam Houston Pkwy. North, visible from the Sam Houston Beltway. The location in Houston's East side is recording considerable growth from Port of Houston activity and other factors. Investors are drawn to these growth areas because of the long-term stability and future potential. Wilson says institutional buyers, in particular, are paying attention.
“This asset was bought by a REIT, which shows the continued focus by institutional buyers on the medical office space,” Wilson tells GlobeSt.com. “This asset sector is considered to be recession resistant because of its ties to the longer term healthcare needs of the various population sectors. The building was attractive to investors because of its ties to the hospital and the long-term tenants in the building that support the hospital. Texas Children's Pediatrics, for example, is the largest pediatric group in the nation.”
In addition to tenants with medical facility ties, investors are looking for other criteria when evaluating medical office assets: 100% occupancy with long-term tenants planning to remain in the space, and buildings with visibility and ease of access for patients, Wilson tells GlobeSt.com.
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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.
