Santa Ana-based Grubb & Ellis Co.’s healthcare unit is on a nationwide buying binge.
The unit began in July with a big deal, spending $90 million for 20 medical buildings in Indianapolis.
The buildings have some 689,000 square feet.
HCP Inc., a healthcare real estate investment trust that moved to Long Beach from Newport Beach in 2004, sold the buildings to Grubb & Ellis.
Clarian Health Partners Inc., a large healthcare system in Indianapolis, is the main tenant with about 325,000 square feet of space. Clarian’s operations include Indiana University Hospital, Methodist Hospital and Riley Hospital, a pediatric facility.
In a federal filing, Grubb & Ellis said it paid for the buildings with a $58 million loan from Fifth Third Bank, $32.7 million that it borrowed from a line of credit with LaSalle Bank and KeyBank and funds raised from investors.
Then Grubb & Ellis bought a pair of nursing homes from HCP.
The nursing homes together have 219 beds and are in Los Angeles County’s El Monte and Lomita.
Along with those deals, Grubb & Ellis bought a portfolio made up of three medical buildings with more than 136,000 square feet of space in St. Louis and O’Fallon, Mo., and an 11,000-square-foot surgery center in Keller, Texas, for $44.8 million.
Grubb & Ellis bought those properties from Dallas-based Cirrus Group LLC.
And at the end of June, Grubb bought SouthCrest Medical Plaza in Stockbridge, Ga., an Atlanta suburb, from an unidentified seller for an undisclosed price.
SouthCrest has two buildings, 81,000 square feet of space and is on 9.7 acres.
It is near two major hospitals: 376-bed Southern Regional Medical Center and Henry Medical Center, which has 215 beds.
Grubb’s healthcare unit buys hospitals, medical office buildings that house doctors, assisted living facilities and nursing homes, as well as buildings that have medical-related tenants.
Device Makers Talk Shop
Several Orange County medical device entrepreneurs and officials shared their experiences, including how to deal with regulators, during an event put on by the Orange County Venture Group last month.
Panelists shared their expertise on various device topics, including the regulatory process, hitting certain milestones, hiring chief medical officers and what happens if the Food and Drug Administration contests an application.
Device makers that are starting out should consider outsourcing, said Rodney Brenneman, chief executive of San Clemente-based Rox Medical Inc.
“(You) absolutely need to keep the burn rate low,” Brenneman said. “I prefer not to build a lot of infrastructure. It’s easier to outsource a lot of manufacturing things.”
Rox Medical is developing devices to treat chronic obstructive respiratory disease, or narrowing of the airways of the lungs.
Companies need to get regulatory advice “sooner rather than later,” said Barbara Niksch, vice president of regulatory, quality and clinical affairs for Visiogen Inc., an Irvine company that is developing replacement eye lenses for cataract patients.
The right time to contact the FDA is different for every company, she said: “You need to have at least a little indication of what the device does what populations it will be effective in and any general claims.”
If a medical device company’s submission is challenged by a regulator, Niksch advised to be cautious about using lawyers.
“Bringing in attorneys does impact the relationship a person has with the FDA, so it’s best if you don’t have to engage them,” she said.
Instead, she said company officials should try and get face-to-face meetings and talk to regulators in a polite, respectful manner.
On the other hand, Niksch said that if regulators are inconsistent, “that’s the time to bring in attorneys.”
“But be very careful who you pick because you don’t want to destroy the relationship or be overly antagonistic,” she said. “But it is important to push and keep going.”
The panel also included Thomas Berryman, chief executive of WaveTec Vision Inc., an Aliso Viejo-based developer of eye diagnostic devices; Reza Zadno, Visiogen’s chief executive; and John Kehl, corporate vice president of corporate strategy and business development for Edwards Lifesciences Corp., an Irvine heart valve maker.
Orange County Venture Group is a networking group that focuses on venture capital activities in the area.
Bits and Pieces:
Nationwide Health Properties Inc., a Newport Beach buyer of and investor in healthcare real estate, was added to the Russell 1000 stock index. Nationwide counted a market value of $3 billion at recent check Patient Care Technology Systems, a Mission Viejo-based subsidiary of Florida’s Consulier Engineering Inc., said that Mary Washington Hospital in Fredericksburg, Va., is using its Amelior software to track patients and assets in its emergency department Clarient Inc. of Aliso Viejo said it launched KRAS, a new test for colorectal cancer. Clarient provides anatomic pathology and molecular testing services for pathologists, oncologists and drug makers AMDL Inc., a Tustin maker of diagnostic tests, said the Food and Drug Administration cleared it to market its AMDL-Elisa DR-70 test for monitoring colorectal cancer patients.
