Transactions (March 2006)

Here’s a switch:

Florida MOB to be

converted to office

FORT MYERS, Fla. – At a time when most medical office space is selling at an investment premium, at least one Florida investment group apparently believes it can do better by converting an existing MOB into mostly commercial office space.

The Fort Myers News-Press recently reported that the 50,000 square foot Heart Building, which it described as a “landmark” MOB, was sold for $8.875 million. The buyer was Riverwalk Investments LLC and the seller was Heart Group Realty.

The broker, Gary Tasman of VIP Commercial-TCN Worldwide, told the newspaper that due to rising construction costs it would be cheaper to convert the “obsolete” MOB to commercial office than it would be to build a new office building.

Southwest Florida Heart Group had anchored the building. But, that physicians practice filed for bankruptcy protection and the partnership was dissolved Aug. 31. Some physicians who had been part of the group still occupy two floors of the building. But, they are on short-term leases and are expected to leave soon, according to the newspaper.

Perhaps one floor will continue to be leased by medical users.

For the Record

A group of four limited partnerships from Calabasas, Calif., has acquired a 27,983 square foot MOB in Banning, Calif., for $8.425 million. The buyers are Beaver Kirkmulon LLC, Beaver Medical LLC, Dacar LLC and Beaver Banning Group LLC. The seller was Glendale, Calif.-based Glenwood Banning Ltd. Partnership. Brad Umansky of Sperry Van Ness in Ontario, Calif., represented the seller and Jeff McGuire of RE/MAX represented the buyer. Built in 1995 and situated on 1.97 acres, the property is 100 percent triple net leased to Beaver Medical Group… Minneapolis-based Swervo Development Corp. bought City Center Professional Building in Plymouth, Minn., from City Center Ventures LLC. The seller is an affiliate of McGough Development, a unit of Roseville, Minn.-based McGough Construction. Terms of the deal were not disclosed, and the transaction had not yet been filed with Hennepin County, Minn., when this edition of Healthcare Real Estate Insights^™ went to press in late February. However, the assessed value is $7 million, according to the county. The 42,000 square foot MOB, developed by McGough in 2002, is 90 percent leased. The transaction was brokered by James McCaffrey, Gina Dingman and Gary Germundsen of the Minneapolis office of St. Louis-based Colliers Turley Martin Tucker… Astra Fund has acquired the 25,380 square foot Pompano Beach (Fla.) Medical and Professional Center from Kaja Properties for $3.8 million. The buyer plans to convert the building into office condos. Astra is a 12-year-old offshore investment company and real estate opportunity fund that concentrates on conversions, distressed and foreclosed properties, land development, and income properties in South Florida. Athan “Tom” Prakas and John Douglas of Prakas Group represented the seller… A northern Illinois-based private investor reportedly purchased a two-story, 17,238 square foot MOB on 1.48 acres in Crystal Lake, Ill., from an Illinois-based land trust for about $3.23 million. Crystal Lake Professional Office was completed in 1989 and is 88 percent leased to medical tenants. Thomas Vincent and Mark Alexander of Sperry Van Ness represented the seller. Randy Erwin of Harding Real Estate represented the buyer… A Texas-based investor has acquired the 25,000 square foot Humble (Texas) Diagnostic Center from a Houston-based limited partnership. Ross Cannizaro of Marcus & Millichap’s Houston office represented both the buyer and seller. ‘