82.4 F
Laguna Hills
Saturday, Aug 13, 2022
-Advertisement-

OC’s Medical Offices Outperform Sector

Healthcare-related properties in Orange County have largely outperformed other office sectors in terms of sales, in a trend that predates the pandemic, new data indicates.

Orange County office sales volume dropped from north of $3 billion in 2017 to about $1.6 billion in 2020, according to research from CoStar Group Inc. 

During that same time, sales volume for medical office properties rose from about $300 million to nearly $480 million.

That figure’s up about 60% and doesn’t include transactions for non-office buildings that are being converted into medical uses, such as City of Hope’s $108 million buy of property at the FivePoint Gateway campus last year.

The five-year average sales volume for medical offices in Orange County is $360 million, with the pandemic helping push investor demand in the sector to new highs last year.

Demand is carrying over in 2021, with investment in the product hovering around $180 million through mid-June, representing more than one-third of the area’s total office investment.

Healthcare REIT 

Leading the medical office investment charge is Healthcare Realty Trust Inc., a Nashville-based real estate investment trust (NYSE: HR) that has spent close to $200 million in OC since early 2020.

It is among the largest commercial real estate investors in the country over that time.

The firm has acquired five area properties in the past year and a half, including four medical offices around MemorialCare’s Saddleback Medical Center.

Healthcare Realty Chief Executive Todd Meredith noted in the REIT’s latest conference call that Southern California, specifically Orange County, has outperformed other markets where the firm “has seen tremendous engagement and momentum.”

The REIT was behind Orange County’s largest medical office buy of 2020 when it spent $80.6 million for the Saddleback Medical Building in Laguna Hills. It bought the 135,904-square-foot office, at 23961 Calle de la Magdalena, from Irvine-based Greenlaw Partners.

Newport, Irvine

Other buyers are also propping up the medical office the sector locally.

A recent notable buy was the $41 million deal for Newport Harbor Medical Plaza.

China-based investor Forward Time Corp. in April closed on the deal, which works out to about $1,368 per square foot, the highest on record for a local medical office property.

OC’s biggest commercial real estate transaction this year is medical-related, though not a office property: Hoag Memorial Hospital Presbyterian’s $226 million purchase of its Irvine hospital campus. 

Previous articlePHIL JAMISON
Next articleLarry White Named Toshiba CEO
-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-