Companies: Montecito (January 2008)

Montecito’s new JV hits ground running

COMPANY ALSO FORMS NEW PARTNERSHIP TO MANAGE PROPERTIES IT BUYS

By John Mugford

In the 19 months or so that Santa Barbara, Calif.-based Montecito Medical Investment Co. (MMIC) has been involved in healthcare real estate, the company has become one of the country’s fastest growing owners of medical-related properties. Through an aggressive acquisition program, Montecito has accumulated a medical office building (MOB) portfolio of about 26 properties valued at more than $400 million.

Some of those acquisitions have been made through partnerships with other firms, such as Newport Beach, Calif.-based Buchanan Street Partners and New York-based ING Clarion Partners.

In recent weeks, Montecito has entered new joint ventures with two firms that should contribute to making it an even bigger player in healthcare real estate.

First, Montecito is teaming with Chicago-based Harrison Street Real Estate Capital (HSRE) to buy and develop a portfolio of MOBs throughout the country. During the next three years, Montecito and Harrison Street plan to acquire and develop an MOB portfolio worth more than $500 million. On its own and with various partners, MMIC has a goal of acquiring a portfolio of more than 2 million square feet of medical space in the next few years.

Montecito’s other venture is with Houston-based PM Realty Group (PMRG), a firm that’s well-known for providing property management services for MOBs. The company is also involved in leasing services, investment sales, construction management, and other real estate-related activities in the healthcare industry. The company’s Web site says it manages more than 150 million square feet of space and provides its services to a portfolio valued at more than $25 billion. It has 25 offices throughout the country.

As a result of its venture with PM Realty, Montecito has formed Montecito Medical Management.