Avison Young to Manage Major Medical Office Portfolio
- Jan 25, 2016
Avison Young‘s very healthy management presence in metropolitan Washington, D.C., just got healthier. The commercial real estate services firm was recently tapped by Harrison Street Real Estate Capital to serve as exclusive property manager for a 1.5 million-square-foot medical office building portfolio.
Harrison Street was looking for a firm that could navigate the geographic and market intricacies of the assignment, and Avison Young emerged as the perfect fit. “Avison Young’s client-centric, principal-led culture is a great match for the complex healthcare real estate sector,” Jim Kornick, principal with Avison Young, told CPE.
The group of properties consists of 24 MOBs in D.C., Northern Virginia and Maryland, and it also bolsters Avison Young’s footprint in the Midwest with buildings in suburban Chicago. Harrison Street was also attracted to the firm’s position as a leader in the healthcare real estate sector in the metro Washington area.
“We have become the largest manager of medical office in the region because our clients recognize that Avison Young delivers the ‘high touch’ property management required for this type of building,” Kornick said. “Medical office buildings are high traffic, operate long hours and serve visitors who are vulnerable. Our clients recognize and appreciate that Avison Young understands the unique needs of medical tenants.” With the new Harrison Street assignment, the firm’s D.C.-area management portfolio now encompasses 10 million square feet of commercial real estate space, 3.5 million square feet of which consists of institutional-quality MOBs.
Harrison Street is a leader in the area’s MOB subsector as well. The real estate investment company acquired the majority of the 24-property portfolio from Washington REIT in late 2013 in a $500 million transaction, and completed the collection in 2015 with the purchase of a 70,000-square-foot asset in Arlington, Va., from ProMed Properties in a $28.5 million deal facilitated by Avison Young on the seller’s behalf.
The MOB subsector is thriving across the country and the D.C. region is no exception. It’s an owners’ market. As Kornick noted, “The Washington Metro medical market is very site-constrained; barriers to new development are high, therefore, there has been limited new development. As a result, demand for class A space is high and alternatives limited.”