FOR IMMEDIATE RELEASE
April 15, 2021
(San Diego, CA) Anchor Health Properties (Anchor), a national full service healthcare real estate development, management, and investment company focused exclusively on healthcare facilities, recently acquired an 81,236 square foot Class A commercial office building in the Mission Valley submarket of downtown San Diego, California. The asset, strategically located at 9095 Rio San Diego Drive, was acquired through a joint venture with co-managed equity fund, Chestnut Healthcare Fund II, and Harrison Street, a leading investment management firm exclusively focused on alternative real assets.
As the largest non-health system owner of clinical medical office space in the San Diego MSA with over 500,000 square feet under management, Anchor intends to re-develop and convert the building to a fully clinical medical use over the coming years in order to provide a best-in-class outpatient medical facility for the residents of Mission Valley.
“Our purpose is to pursue better healthcare through real estate solutions and this acquisition and subsequent repositioning effort is a prime example of what our integrated, cross-collaborative platforms can accomplish,” said Ben Ochs, Chief Executive Officer with Anchor. The Company’s Western US development and asset management teams, led by Vice President of Development, Sean Miller, and Vice President of Asset Management, John Koss, will oversee the building re-development and leasing efforts.
Directly in the growth path of San Diego University’s $3.5 billion planned campus development and Scripps Mercy Hospital’s planned 710,000 square foot in-patient tower, this Class A commercial office building is well positioned for medical office conversion. With a 5:1000 parking ratio (necessary for clinical medical use in the City of San Diego) and close proximity to multiple urban hospital campuses, including Scripps Mercy Hospital, UC San Diego Health Hospital, and Rady Children’s Hospital, the building will provide for the supply of high-quality clinical medical office space in response to an increasing demand for inventory and a shortage of space options. The clinical medical office vacancy both in central San Diego as well as in the broader MSA is among the lowest in the US.
“Driven by the large employment base and significant projected population expansion expected in the next ten years, this investment is part of a larger initiative to help improve access of care in central San Diego,” shared James Schmid, Chief Investment Officer and Managing Partner with Anchor. “Our goal is to build upon previous Anchor efforts across the MSA and create additional value by re-developing, re-branding, and leasing up converted and vacant space over time with clinical medical services. Strategically located in a highly trafficked, highly visible setting in central San Diego, this asset will attract best-in-class clinical medical tenants that are looking for a superior patient experience in an outpatient setting that avoids the parking, cost, and leasing restriction elements of on-campus locations in Hillcrest and Kearny Mesa.”
As part of the transaction, Anchor has agreed to terms with a best-in-class regional medical specialist practice to lease and operate a five operating room surgery center on the ground floor of the building, taking nearly 20,000 square feet of space and serving as an anchor tenant from which to grow a broad and complementary ecosystem of providers.
Additional target practice lines for clinical medical office conversion include outpatient surgery centers, imaging centers, urgent care, behavioral health, ophthalmology, oral surgery, dermatology, plastic surgery, orthopedics, internal medicine, and family medicine.
Elliott Sellers, Vice President of Investments with responsibilities for new business opportunities across the West Coast, sourced the transaction and oversaw the investment process. Mr. Sellers added, “This is a significant and strategic acquisition for Anchor in one of our key target US markets. The additional value in converting the space from commercial use to clinical medical use will allow for multiple benefits to the surrounding Mission Valley community from added access to outpatient medical services, choice from dynamic and synergistic clinical tenancy, and proximity to neighboring hospitals. There is a surprising lack of dedicated medical facility options for patients in Mission Valley at present, and as an industry leader we will strive to address the identified need through our investment and redevelopment efforts.”
Hunter Rowe at CBRE provided advisory services on behalf of the seller. Zack Holderman at CBRE sourced secured debt financing for the property through MetLife.
For additional information about available space in the building, please contact Lars Eisenhauer with CBRE at Lars.Eisenhauer@cbre.com.
About Anchor Health Properties
Anchor Health Properties is a national, full-service healthcare real estate development, management, leasing, and investment serving investors and health systems. Anchor takes a strategic approach to navigating the extremely competitive healthcare marketplace, considering multiple angles, such as retail drivers, customer experience, branding and efficiency of the project. We develop and manage projects across the United States that respond to the new landscape of employed physicians, team-based care, the need to optimize assets and reduce duplication, and the integration of care and technology. Anchor manages and leases seven million square feet of medical office space, inclusive of numerous projects under construction. Anchor maintains multiple offices nationwide and features more than 80 professionals in its ranks. Over the past five years, Anchor principals have acquired and/or developed more than $3 billion of medical real estate across the country. Healthcare today calls not only for new and more efficient ways of delivering outpatient services, but also a different kind of healthcare development and management company. For more information, please visit: www.anchorhealthproperties.com.
About Harrison Street
Harrison Street is one of the leading investment management firms exclusively focused on alternative real assets. Since inception in 2005, the firm has created a series of differentiated investment solutions focused on demographic-driven, needs-based assets. The firm has invested across senior housing, student housing, healthcare delivery, life sciences and storage real estate as well as social and utility infrastructure. Headquartered in Chicago with offices in London and Toronto, the firm has more than 190-employees and approximately $32 billion in assets under management. Clients of the firm include a global institutional investor base domiciled in North America, Europe, Middle East, Asia and Latin America. Harrison Street has been awarded Best Places to Work by Pensions & Investments for the last seven consecutive years and was named 2020 Global Alternatives Investor of the Year by PERE. For more information, please visit www.harrisonst.com.
Contact: Rachael Hall, Anchor Health Properties
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