Davis Pays $38M for MOB

84 Marginal Way. Image courtesy of Davis

Minneapolis-based Davis has paid $37.8 million for 84 Marginal Way, a 107,228-square-foot medical office building in Portland, Maine, through its recently launched Davis Medical Investors LLC fund.

According to CommercialEdge information, Atlantic National Trust previously owned the Class A asset dubbed The InterMed Building, after its anchor tenant. Institutional Property Advisors advised the seller in the disposition.

Davis launched the investment fund in December 2020, with the $112 million acquisition of eight medical office buildings totaling 309,735 square feet in Tennessee, Minnesota, Ohio and Connecticut. According to Mark Davis, managing partner at Davis Medical Investors, the Portland purchase represents the firm’s first foray in Maine’s medical office market.

“The fact that InterMed was the lead tenant and occupies a significant amount of the space made it a very attractive acquisition for our team. We look forward to expanding our presence in Maine, as opportunities become available. The goal of our DMI Fund is to acquire at least $150 million of quality medical buildings each year,” Mark Davis told Commercial Property Executive.

To finance the acquisition, Davis took out $25 million from its $250 million debt vehicle put in place by Capital One. “The balance is available to draw on for future acquisitions”, Mark Davis explained.

A high-quality property

According to CommercialEdge data, The InterMed Building was the largest medical office asset to change hands in Portland since the beginning of the year. Completed in 2008, the 10-story asset rises on a 1.4-acre parcel in Bayside District. The property comprises six floors of medical office space built atop a four-level parking garage with 524 spaces, as well as 5,200 square feet of retail.

Fully leased at the time of sale, the facility is anchored by InterMed, Maine’s largest private medical practice. Occupying more than 63,000 square feet across the building’s top four floors, InterMed’s clinic provides a wide array of health-care services, such as internal medicine, family practice, physical therapy, pediatric medicine, obstetrics and gynecology, emergency medicine, dermatology and cardiology, among others.

Fronting Interstate 295, the property is less than 1 mile from downtown Portland. Maine Medical Center and Northern Light Mercy Hospital are both within a 2-mile radius of the facility.

Joe Massa, senior managing director at IPA, assisted the seller in the deal. Massa also brokered the sale of a 76,000-square-foot medical office building in Harrisonville, Mo., in September.