Sunrise Medical Campus Sells 3-Building Property Near Tacoma
- Feb 18, 2014
Medical office building properties hold an increasingly high position on investors’ radar, and Sunrise Medical Campus in the suburban Tacoma, town of Puyallup, is no exception. With the assistance of Jones Lang LaSalle’s Capital Markets Group, the ownership team of Sunrise Medical One L.L.C. and Sunrise Medical Two L.L.C. just sold the 98,800-square-foot complex to Clise Properties for $407 per square foot.
The price tag on the property is notable in light of the current state of the MOB investment sales market in the U.S. In 2013, the average sale price for MOBs was $221 per square-foot, according to research from Real Capital Analytics. Investors were all but fighting for Sunrise.
“We had a three-round bid process and buyer interview process to reach final pricing and buyer selection,” Lori Hill, managing director with JLL’s Capital Markets Group, told Commercial Property Executive. “Although the ultimate buyer was a local/private [entity], the healthcare REITs and MOB operators and funds pursued aggressively.”
Developed in 2004, Sunrise features two single-story buildings completed in 2004 and an additional multi-story structure that debuted in 2008. The state-of-the-art property is 95.6 percent occupied, featuring a diverse roster of well-established community medical service providers with an average lease term of 8.3 years.
“The sunrise asset is a top-quality asset that was well-designed and thoughtfully leased to meet the needs of the local community and, therefore, is a star performer,” said Hill. “That quality is reflected in the pricing of over $400 per square-foot for off-campus product.”
Puyallup is not Seattle, but it’s still part of the Puget Sound area, which is a leading market for investors in healthcare real estate due to its world-class health systems, well-insured population and robust corporate employer base, according to JLL. And then there is the issue of supply. “Our market sees relatively few Class A institutional assets come to market, therefore, they tend to be aggressively bid and extract a value premium compared to many other markets,” Hill concluded.