Morgan Stanley Buys $68M Bay Area MOB

321 Middlefield. Image courtesy of Newmark

Morgan Stanley has paid $68 million for a 44,719-square-foot medical office building in Menlo Park, Calif. Pollock Financial Group sold the fully leased asset in a transaction arranged by Newmark.

With a $4.42 billion sales volume year-to-date as of November, the Bay Area dominated the West Coast in terms of office transactions, as shown by a recent CommercialEdge report. The market also registered the lowest growth in vacancies over the past 12 months at just 0.07 percent, according to the research.

A Bay Area medical office asset attracting investor interest

The two-story facility came online in 1962 on a 3-acre site, and underwent cosmetic renovations in 2009, according to CommercialEdge. Menlo Medical Clinic, a partner of Stanford Health Care, DeMarta Dental and Lucile Packard Children’s Hospital Stanford are among the tenants at the property.

Located at 321 Middlefield Road, with connectivity to Interstate 101, the medical office building is some 3 miles from Stanford Hospital, the only Level 1 trauma center on the San Francisco Peninsula. Downtown Menlo Park is less than 2 miles away.

The Newmark team that facilitated the transaction included Executive Vice Chairman & President Steven Golubchik, Vice Chairman Edmund Najera and Director Darren Hollak, together with Senior Managing Directors Jonathan Schaefler and Jesse Millman.

In a prepared statement, Golubchik said that the asset attracted strong investor interest, despite market volatility. According to Newmark research, Menlo Park accounts for 6.5 million square feet of the approximately 39 million square feet of office space in the South Peninsula market, with a vacancy rate of 12 percent in the fourth quarter of 2022.