New firm makes first MOB acquisition
JOSS REALTY PLANS TO TARGET ASSETS IN THE $20 MILLION TO $50 MILLION RANGE
By Brian Busek
JOSS Realty Partners LLC is a new player in urban commercial real estate – and, it appears, on the medical real estate scene.
According to a recent news release, the new, New York-based firm is led by Steve Klein and Larry Botel. Its target market is urban properties in the $20 million to $50 million range in cities along the East Coast and Southeast Florida. Recent acquisitions by the company in the nation’s capital also suggest that medical real estate figures into the firm’s plans.
JOSS recently purchased a pair of office buildings in downtown Washington – one located at 2131 K St. NW and another at 1776 Massachusetts Avenue – for a total of $54.6 million.
The eight-story, 71,400 square foot K Street building, located on about one-third of an acre near George Washington University Hospital, is the purchase most notable to the medical community. According to published reports, it was developed in 1981 and sold to Douglas Development Corp. for $5.2 million in 1998, which then renovated the facility.
It was sold to JOSS for an undisclosed price. The property has an assessed value of $14.9 million. Gerry Trainor of Transwestern Commercial Services represented Douglas Development in the transaction.
The building already houses several healthcare-related tenants. JOSS officials say they plan to invest an additional $2.5 million in renovations at the site to reposition the property for medical offices with ground floor retail.
Cirrus Group buys,
plans to renovate two
Cleveland-area MOBs
DALLAS – The Cirrus Group announced Dec. 9 that it has acquired Parma Ridge Medical Building in Parma, Ohio, and Deaconess Professional Centre in Cleveland. Terms were not disclosed.
Parma Ridge Medical Building, a three-story, 29,337 square foot medical office building (MOB) built in 1978, is adjacent to Parma Community General Hospital. Cirrus says it will soon begin renovations and has plans to expand the services housed within to encompass more specialties and ancillary services.
Deaconess Professional Centre, a four-story, 41,126 square foot MOB built in 1984, is on the new MetroHealth South campus in Cleveland. Cirrus says it will serve as the primary on-campus facility for the new MetroHealth campus. Plans call for the MOB to be upgraded to provide for a complementary facility to the attached, renovated hospital, and Cirrus says it plans to expand the medical services located in the building. MetroHealth South, the health system’s initiative to provide a one-stop location for geriatric services, is to be fully operational by spring 2007.
Leasing contracts for physicians are available in five- to 11-year terms and physician ownership is also available, according to Cirrus.
The deal marks the firm’s entry into the Cleveland metro area market, but not its first foray into Ohio. Cirrus acquired the Wright Health Building in Dayton earlier this year.
For the Record
Memorial Hospital of Colorado Springs, Colo., disclosed plans to sell its 63,000 square foot Briargate Medical Campus in early 2006. Briargate, an office and medical services complex on 15 acres, opened in June 2003. The city owned property is scheduled to go up for bids this month, with a starting bid of $15 million. Memorial is also selling two smaller buildings, each valued at about $1 million. The city says it wants to sell non-core real estate assets to unlock capital for other uses… Shawnee Mission Medical Office Buildings in Shawnee, Kansas, were acquired by a partnership of Minneapolis-based Frauenshuh Cos. and physicians who practice in the MOBs. The MOBs include the three-story, 89,561-square-foot Georgetown Medical Building; the three-story, 46,095-square-foot Antioch Hills Medical Building; the two-story, 47,225-square-foot Shawnee Mission Medical Building; and the two-story, 21,141-square-foot Prairie View Medical Building. The four MOBs, which are on the campus of the Shawnee Mission Medical Center, are reportedly a combined 99.45 percent leased. Bruce Meland of CBRE/Melody’s Minneapolis office arranged $17.2 million in permanent financing for the acquisition… Lexington Corporate Properties Trust (NYSE: LXP) announced Nov. 16 that is has acquired a new 72,683 square foot MOB on 8.5 acres in Sugar Land, Texas, for about $14.4 million. The facility is net-leased to Kelsey-Seybold Clinic, an affiliate of St. Luke’s Episcopal Health System, through November 2020. The New York-based real estate investment trust (REIT) said it has arranged non-recourse first mortgage financing of $10 million for the property, with the loan bearing interest at a fixed rate of 5.64 percent and maturing 15 years after closing… Westpark IV LLC, a partnership of Colorado-based investors and Rex Motors Inc. of Bellingham, Wash., reportedly acquired for $10.3 million a four-building office park in Westminster, Colo., that includes some medical offices. The properties have a total of 86,000 square feet… Berry Surgery Center LLC, a Chicago-based group of private investors, acquired the two-story, 27,127 square foot Berry Surgery Center on 1.7 acres in Farmington Hills, Mich., for more than $8 million from an undisclosed private medical investment group in Warren, Mich. The MOB is 100 percent leased… Ridgefield Professional Office Complex LLC recently acquired a 205,000 square foot MOB and 50 acres of surrounding land in Ridgefield, Conn., for $7 million. Sean Cahill, Michael Dillon and Greg White of CB Richard Ellis (CBRE) represented the seller, ASML USA… Magnolia Industrial Park LLC of El Cajon, Calif., paid a reported $5.4 million to Shea Medical Offices LLC of Mesa, Ariz., for Shea Corporate Medical Center in Scottsdale, Ariz. The brokers were Ken Elmer, Fred Buck and Ron Schooler of EBS & Associates; Andy Melzer of Grubb & Ellis; and Kerry Shimpf of East County Properties… Marcus & Millichap facilitated the sale of Beltway Medical Plaza, a 10,614-square-foot MOB in Houston. The buyer, seller and purchase price were not disclosed. q
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