CBRE IM Pays $135M for Orange County MOBs

Mission Medical Center Tower. Image courtesy of CBRE Investment Management

CBRE Investment Management, working on behalf of a fund it manages, has partnered with Healthcare Realty Trust Inc. for the purchase of a four-building medical office portfolio totaling 282,683 square feet in Mission Viejo, Calif. The joint venture paid $134.8 million for the properties, Orange County records show.

The medical office buildings were previously owned by Healthcare Trust of America Inc. before its merger with HRT. HTA paid $150 million for the properties six years ago, according to CommercialEdge information.

The four buildings surrounding Mission Hospital came online between 1974 and 1985 and were recently updated. Mission Medical Center Buildings 1-3 at 27800 Medical Center Road and Mission Medical Center Tower at 26732 Crown Valley Parkway include pharmacies, upgraded lobbies, newly added gurney-sized elevators as well as updated landscaping and ample parking. Focusing on sustainability, the renovations also included the addition of HVAC roof systems and LED lights, as well as the use of recycled water in landscaping.

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Due to the sector’s performance during recent market cycles, CBRE IM plans to invest more in medical office properties nationwide, Sondra Wenger, head of Americas Commercial Operator Division of CBRE Investment Management, said in prepared remarks.

Investing in Orange County MOBs

During the first seven months of the year, 13 medical offices totaling 919,392 square feet traded across the Orange County market, according to CommercialEdge. The transactions averaged $307.20 per square foot, below the roughly $477 per square foot paid by CBRE IM.

One of the largest deals involved a two-building medical office complex totaling 146,510 square feet in Newport Beach, Calif. Lionstone Investments paid $125 million for the fully leased asset through an all-cash transaction.

In another notable transaction, Anchor Health Properties purchased Woodbridge Square Medical in Irvine, Calif., a property that was 94 percent leased at the time, according to a CBRE report. The Boureston Cos. sold the multi-tenant building for $27.6 million.