At a rocky time for real estate investors, the healthcare sector continues to garner strong interest within the commercial market, with two local assisted living facilities trading recently as part of a portfolio sale.
MedCore Partners, a Dallas-based broker, developer and manager of senior living facilities, recently closed on a 582-unit independent living, assisted living and memory care portfolio across seven properties in Washington and Orange County.
The two local assets include the 91-unit Del Obispo Terrace in San Juan Capistrano and the 76-unit Westminster Terrace in Westminster totaling north of 390,000 square feet.
BMO Harris Bank provided a senior loan for the $52 million acquisition.
The 113,500-square-foot San Juan Capistrano property was built in 1985 and last traded in 1995 for $4.8 million; prior sale comps were unavailable for the 277,539-square-foot Westminster facility, which was built in 1999.
The company plans on investing more than $13 million in the facilities.
Chicago-based public REIT Ventas Inc. (NYSE: VTR) is the seller.
Active Healthcare Scene
The deal follows other local real estate moves in the healthcare sector.
“The healthcare real estate sector continues to pull out of COVID-19 faster than many other sectors of commercial real estate,” notes John Wadsworth, a senior vice president at Colliers who specializes in healthcare-related transactions.
IRA Capital LLC is one local firm that’s bullish on the sector, with a renewed focus on “divesting riskier assets and redeploying capital into properties that are more resistant to downturns, such as healthcare and life sciences,” IRA Principal Jay Gangwal told the Business Journal last month.
The Irvine-based real estate investment firm made headlines last month when it paid $73.5 million for the three-building Element office campus in Aliso Viejo in one of the largest area office deals of the year.
The deal works out to a price of nearly $460 per square foot for the property, which is lesed to healthcare tenant Glaukos Corp. (NYSE: GKOS), a medical device maker that is in the process of moving its headquarters to the campus.
The deal followed the IRA Capital’s $38.4 million buy of a 56,000-square-foot medical office just off the 55 freeway in Santa Ana.
Healthcare is also poised to lead future commercial development locally, with the City of Hope heading the largest project currently moving ahead in Orange County.
In late May, the organization bought a 190,000-square-foot, four-story building at Irvine’s FivePoint Gateway office complex and 12 acres of land for $108 million—tops for the year among area commercial real estate deals—with plans to convert the building into its first comprehensive cancer center outside of its main campus in Duarte.
