On behalf of Ownership, CBRE, Inc. is pleased to present qualified investors the opportunity to acquire the leasehold interest in the Phoenixville Medical Office Building I (“The Property” or “Building”), a 62,175 rentable square foot, three-story medical office building at 824 Main Street in Phoenixville, Chester County, Pennsylvania. Situated on the Phoenixville Hospital campus, the Property sits on a 0.75-acre site which is ground leased with 49 years remaining from the adjoining Phoenixville Hospital. The Property; built in 1991, is currently 90.1% leased to an array of medical tenants and is easily accessible to tenants and visitors via the abundant parking surrounding the hospital which is owned by Community Health Systems (CHS), a public company (symbol CYH) based in Franklin, TN.
The investment offers an investor an expected strong initial yield with minimal projected physician tenant turnover. The property location on the campus of the Phoenixville Hospital with a walkway providing direct access into the hospital is a highly sought after medical office building amenity.
Rents are significantly under market which provides significant leasing upside. Virtually every lease in the building is below market. The neighboring building is achieving rents that average in most cases $10-$15 psf over the average rent for the Offering. There is the potential of achieving significantly higher rents in the near term.
Other value add opportunities include modifying some of the physician’s square footages from usable to rentable upon lease expirations.
- Long term, diverse and strong credit tenant base
- 90.1% occupancy
- Value Add Opportunity:
- Significantly under market rental rates
- Multiple leases written upon ‘useable’ rather than ‘rentable’ square footage; approximately +/- 8,000 SF additional unrealized income
- All leases “triple net” (NNN)
- The only ‘attached to hospital’ Medical Office Building on the Phoenixville Hospital Campus
- Recent significant capital expenditures by Ownership; including HVAC cooling tower, boilers and common area refurbish
- No obligation for exterior common area maintenance (including parking, snow removal and landscaping); such is obligation of Ground Lessor
- Property is offered free and clear of any existing debt
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