Norvin Healthcare Enters Philly with Navy Yard Buy

PHILADELPHIA—Norvin Healthcare Properties has acquired a fully-occupied medical office building at 3 Crescent Drive at the Philadelphia Navy Yard from Liberty Property Trust in an off-market transaction, Globest.com has learned.

The 96,000-square-foot building is mostly occupied by Thomas Jefferson University Hospitals Inc. (Jefferson Health) under a long-term lease. No financial terms of the transaction were disclosed.

Liberty Property Trust, which is being merged with Prologis in a nearly $13-billion deal, has sold a number of its properties in the Philadelphia Navy Yard of late, including One Crescent Drive, which totals more than 76,000 square feet, and the 80,050-square-foot 201 Rouse Blvd. office building to Ensemble Real Estate. The Phoenix-based firm stated last month that it also had a deal to acquire 150 Rouse Blvd., a 56,412-square-foot office building and 1200 Intrepid Ave., a 91,971-square-foot office property at the Navy Yard from Liberty Property Trust.

Norvin Healthcare president Norm Livingston, says the off-market acquisition of 3 Crescent Drive took more than a year to finalize.

“We approached Liberty upon hearing of their plans to divest of all non-industrial assets in their portfolio. We knew they had a few interesting medical assets and we were able to secure a contract for 3 Crescent Drive,” he adds.

Norvin Healthcare, which has offices in New York City and Houston, maintains a portfolio that is largely leased to strong-credit, non-profit health systems, including: New York University (NYU), Mount Sinai, Methodist Health System, MD Anderson, UT Health, LifeBridge, CHI and others.

The firm owns a total of approximately 2 million square feet of single-tenant and multi-tenant acute care, post-acute care, clinical and medical diagnostic office buildings. The acquisition of 3 Crescent Drive marks Norvin Healthcare’s entrance into the Philadelphia medical office space market.

3 Crescent Drive is a Class A, mission-critical medical facility that has earned the Leadership in Energy and Environment Design® (LEED) Gold Certification. Anchored by Jefferson Health, other building occupants include Jefferson Health Surgical Center, a joint venture including Jefferson Health, The Rothman Institute and Nueterra Healthcare.

Steve Rooney, Norvin senior director of Acquisitions, notes the newly acquired property is located in the fast-growing Philadelphia Navy Yard, a 1,200-plus-acre campus with 6.3 miles of waterfront and 165 businesses employing more than 13,500 people. The Navy Yard has become a magnet for businesses with a critical mass of life science companies operating in the master development that will soon include a large-scale residential component and additional hospitality and retail outlets. The 3 Crescent Drive site is visible from U.S. Interstate 95 and Broad Street, and sits just across the highway from the South Philadelphia Sports Complex, home to all of Philadelphia’s professional sports teams.

Rooney adds, “The quality of the tenancy and the long lease term should provide a strong, reliable stream of cash flow for our investors for years to come.”

The property will be added to the Norvin Core Plus Fund, which targets healthcare properties leased to credit tenants with long-term leases.

“The 3 Crescent Drive acquisition is a perfect fit for the Norvin Core Plus Fund,” says Livingston. Jefferson Health recently spent significant capital on building upgrades so further building improvements are not necessary, Livingston notes.

The company, which has holdings in Texas, New York City, Maryland and elsewhere, is looking to acquire medical properties all along the Eastern Seaboard, but Livingston notes that market conditions are difficult at the moment. Norvin is looking at opportunities from Maine to Florida, he adds.