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Wednesday, Jun 12, 2024

Investors Make Medical Deals Near Hoag-Newport

A pair of healthcare-related properties in the vicinity of Hoag Memorial Hospital Presbyterian in Newport Beach have changed hands in separate transactions valued at close to $63 million together.

In the larger deal, Pacific Medical Plaza, a four-story medical office building in Costa Mesa about a mile from the hospital at 1640 Newport Blvd., was recently acquired by Welltower Inc., a Toledo, Ohio-based real estate investment trust that buys senior housing properties and other forms of housing and medical facilities.

Welltower paid about $43 million for the 76,500-square-foot steel- and glass-framed building, or roughly $560 per square foot, based on a reading of property records.

Pacific Medical Plaza was built 10 years ago on 2.4 acres near the end of the Costa Mesa (55) Freeway that previously held two trailer parks.

The project was developed by Irvine-based Brown Associates, which took out a $26.5 million loan from Transamerica Life Insurance Co. in 2007 to build it, records show.

Welltower is assuming the remaining part of the loan—a little more than $20 million—as part of the transaction, property records show.

Pacific Medical Plaza is about 91% leased to a variety of plastic surgery, sports medicine, orthopedics and related tenants.

Monthly rents run about $3.75 per square foot, according to marketing material from the Irvine office of Colliers International, whose John Wadsworth had the sales listing for the property and who had been leasing the space at the facility.

The purchase is one of two recently built medical office properties in Orange County that Welltower now owns.

In February, an affiliate of the REIT took over ownership of Fullerton’s Providence Medical Center, an 84,000-square-foot office property across the street from St. Jude Medical Center. It, like Pacific Medical Plaza, was built about a decade ago.

That deal, made with Accretive Realty Advisors in Newport Beach, was valued at about $65 million, according to CoStar Group Inc. records.

Welltower is the largest healthcare REIT in the world, with a market value of roughly $26.6 billion; a bulk of its holdings in OC are senior living facilities, including the Silverado Senior Living facility in Newport Mesa about a mile from its new purchase in Costa Mesa.

Its biggest area purchase took place in October when it bought a 19-property portfolio of independent living, assisted living and memory care centers across California, including four local facilities, for a reported $1.15 billion.

That deal was made with Newport Beach’s Vintage Senior Living.

Atria Buy

One Newport Beach property of Vintage Senior Living that wasn’t part of the October transaction with Welltower has also sold, to a different buyer, according to property records.

An affiliate of Atria Senior Living, a Louisville, Ky.-based operator of independent living, supportive living, assisted living and memory care communities, recently closed on the purchase of Vintage Newport, a senior living and assisted living facility at 393 Hospital Road.

Vintage Newport is across the street from Hoag’s main hospital facility in Newport.

The property was sold by a unit of Vintage Senior Living as part of a transaction valued at nearly $19 million, according to CoStar data and property records.

Atria operates a number of similar properties in OC, including facilities in Irvine, Mission Viejo and San Juan Capistrano.

Vivante II

More retirement-type housing is in the works for the area around Hoag.

Groundbreaking for the next phase of Vivante on the Coast, a high-end community in Costa Mesa about a mile from Hoag Memorial in Newport Beach, is scheduled for next year, according to city filings.

Santa Ana-based Nexus Cos., the developer of the 185-unit Vivante project, which opened in 2013, last year got approval from Costa Mesa’s planning commission to build a second phase of the project on a 2.25-acre lot next to its existing facility.

Plans call for the second phase of Vivante, which is on Monrovia Avenue, to hold an additional 111 independent- and assisted-living units for 130 total beds. It will run about 148,000 square feet, according to Nexus, which is headed by Chief Executive Curt Olson and President Cory Alder.

Plans initially called for construction to start by this month, but delays related to the project’s architect and other permit-related issues required the developer to go back to the city for a one-year extension on the start of construction.

Along with residences, the four-story facility will also include a 1,700-square-foot fitness center and a 3,900-square-foot community events center. Membership in the fitness center will be available “at a nominal cost” for local nonresidents of Vivante who are older than 60, according to city documents.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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