Banking on an aging baby boomer population, Cypress West Partners and global investment firm TPG Angelo Gordon have acquired two medical outpatient buildings in California and Arizona for a combined price of $40 million, the firms told the Business Journal.
“The addition of these two high-quality assets to our portfolio in major West Coast markets to close out 2025 marks another significant step in our national growth strategy with TPG,” Ed Hernandez, vice president of acquisitions at Rancho Santa Margarita-based Cypress West Partners, told the Business Journal.
The joint venture’s latest acquisitions include a 91,200-square-foot medical office building in Scottsdale and a 41,100-square-foot property in Chino Hills, bringing its portfolio to 13 medical outpatient properties since launching a $300 million fund in 2024.
The companies declined to comment on how much of the $300 million is left for further acquisitions.
The larger property, Pima Medical Pavilion at 8415 North Pima Road in Scottsdale, was bought from Healthcare Realty Trust.
JLL represented the seller.
The building is 92% leased and is anchored by local medical practices, including Bloom Reproductive Institute, Scottsdale OBGYN Specialists and SurgCenter/USPI.
The joint venture also acquired a two-story medical office building at 2140 Grand Ave. in Chino Hills.
CBRE represented the seller.
Company officials said the Chino Hills building is 94% leased, with Pomona Valley Hospital Medical Center as the main tenant.
Recession Resistant
Healthcare real estate is attracting more investors as the baby boomer population ages and outpatient care continues to see steady occupancy and rent growth. The baby boomer population, born between 1946 and 1964, is expected to reach 29 million by 2044, according to the nonprofit think tank Brookings.
Hernandez agreed, saying that medical office buildings have remained strong across economic cycles, supported by limited new supply, rising rents, and long-term demand from an aging population.
“Medical office is recession-resistant,” said Hernandez. “We’ve seen rent growth and increases in occupancy over the past five years. Healthcare is a growing industry, primarily because the baby boomer generation is not going to peak probably for another 10 years. Limited new supply, rising rents, and an aging population make it a favorable asset class.”
In 2024, Cypress West and New York-based TPG Angelo Gordon launched a $300 million joint venture to acquire medical outpatient buildings across the Sunbelt region and West Coast markets.
Since then, the partners have acquired 13 properties in Florida, Tennessee, Utah, California, Arizona and Nevada, and plan to continue expanding at a pace beyond their initial pace, Hernandez said.
Some of the properties they bought include the two-building, 68,000-square-foot La Cholla Medical Plaza at 6130 N. La Cholla Blvd. in Tucson, Arizona; the MacFarlane Medical Center at 8352 W. Warm Springs Road in Las Vegas and a 37,000-square-foot outpatient medical building at 450 4th Ave. in Chula Vista.
“The plan is to continue to expand and build on our success, even more than what we’ve done in the last two years,” said Hernandez.
Cypress West has focused exclusively on medical office properties since its founding in 2013, citing the sector’s stability relative to traditional office and industrial real estate.
A CBRE report from November found that investment in medical outpatient buildings nationwide rose 27% in the third quarter to $2.7 billion. The average asking rent also hit a record high of $25.20 per square foot.
In the third quarter of last year, Southeast, Midwest and West were the top investment areas for medical office building investors, CBRE reported.
