Transactions: CNL pays $54.8 million for MOB complex near Las Vegas; Fairfield brokers deal

HENDERSON, Nev. – A Las Vegas-based development firm that specializes in shopping centers delved into healthcare real estate back in 2006, completing the three-building, 139,222 square foot Siena Heights Medical Pavilion across the street from a major hospital in Henderson.

The company, Siena Heights Holding Co., recently took advantage of strong HRE market pricing, selling the complex to Orlando, Fla.-based CNL Healthcare Properties for $54.8 million. The sale price works out to $394 per square foot (PSF).

Representing the seller, which also developed a retail center next to the MOB complex, was Denver-based Fairfield Advisors.

The complex, across Siena Heights Drive from the 219-bed St. Rose Dominican Hospital Siena, part of San Francisco-based Dignity Health, is about 90 percent occupied, according to Greg Trainor, managing partner with Fairfield Advisors.

After the transaction, Rancho Santa Margarita, Calif.-based Cypress West Partners, which focuses on HRE, was hired by CNL to provide leasing and property management services for the complex, whose largest tenants include the Dignity Health system, kidney care provider DaVita and an insurer United Healthcare Services.

St. Rose Dominican opened the Siena campus in 2000 and has recently expanded the hospital with a new $160 million, 100-bed tower that brings the total bed count to 326.

“This will be a very good investment for the buyer,” says Mr. Trainor. “That area of Greater Las Vegas is growing and is in need of more healthcare services, as evidenced by the hospital’s expansion.”

He says the Siena Heights Medical Pavilion is home to about 15 tenants, including a number of independent groups.

“There were a number of parties very interested in acquiring this property,” he adds. “Our job for the seller was to offer the portfolio to a limited number of buyers in a quasi-off-market offering.”

Mr. Trainor, whose firm has brokered more than $243 million of healthcare asset transaction since its founding in 2012, says he sees demand for MOBs remaining as strong as it is throughout the coming year, perhaps longer.

“We’re still seeing interest in this product type from a variety of buyers, including those who were not interested up until a few years ago, such as family offices, private equity groups, and others,” he says.

“It looks like interest rates will rise a bit in coming months and there might be a bit of a pause, but no one we’ve heard from says they’re not interested in medical office buildings. It’s still a sector that a lot of people are bullish about.”

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