Premier Medical/Office Property Anchored by Kaiser Permanente
SAN DIEGO, Calif. – March 6, 2018 – Excel Centre, a premier 83,213-square-foot (sf) medical office building in San Diego, California anchored by Kaiser Permanente has recently sold to Chicago-based MBRE Healthcare for $37.1 million. The property is located at 17140 Bernardo Center Dr. in Rancho Bernardo, an upscale master-planned community along Interstate 15 approximately 20 miles northeast of downtown San Diego. The seller was an institutional investor, which was represented by Rick Reeder, Brad Tecca and Travis Ives of Cushman & Wakefield’s San Diego office. The sale transpired in late 2017.
Mr. Reeder, an Executive Managing Director who along with Mr. Tecca specializes in Capital Markets services, said, “The Class A asset comprises a highly desirable and rare investment profile that includes stable cash flow backed by financial strength. As the project’s sole and majority tenant occupying the first two floors, Kaiser’s recent expansion and lease extension within the building signals their long-term commitment to the project and their patients in Rancho Bernardo. Kaiser offers a wide variety of services at this location including primary care, OB/GYN, pediatrics, radiology and behavioral health.”
He added, “The buyer will also look to take full advantage of the significant value-add component in converting the remaining third floor balance of the building, currently vacant, to medical office use, as existing property zoning permits 100% medical use. Medical office tenant demand supports this clear path to embarking on a full medical conversion and capturing rental rates that command a 20-25% premium over traditional office.”
Mr. Ives, a Senior Director with Cushman & Wakefield’s Healthcare Practice Group and national lead for the firm’s Healthcare Capital Markets platform, said, “Rancho Bernardo is a key location along the I-15 Corridor for medical service providers who cluster to gain access and proximity to strong demographics that feature a growing and affluent patient base. Cushman & Wakefield has also been retained for the leasing assignment on Excel Centre and plans will soon be announced for the rebranding of the project to become the I-15 Corridor’s finest Class A multi-tenant medical office building.”
Excel Centre is part of the larger Park Terrace, a walkable mixed-use development featuring offices, hotels, restaurants and fitness in addition to immediate accessibility and visibility from Interstate 15. An abundance of retail and services are also closely proximate. In addition to its desirable location, Excel Centre provides stunning architectural designs with top-tier finishes and flexible floor plates, as well as a 4 per 1,000 sf parking ratio with subterranean parking, a key differentiator from other medical office buildings in the area and a highly attractive feature for physicians. Nearby hospitals include Palomar Medical Center in Poway (formally known as Pomerado Hospital), the newly completed Kaiser Permanente San Diego Medical Center, and Palomar Medical Center in Escondido.
Mr. Ives added, “The 1-15 Corridor is San Diego County’s smallest medical office submarket, and maintains limited inventory and supply and no new speculative construction. Signifying the demand and need for medical space in the region, San Diego County has absorbed nearly 1.3 million sf of medical office space since 2011.”
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm with 45,000 employees in more than 70 countries helping occupiers and investors optimize the value of their real estate. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
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