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Transactions: A pair of MOBs sells for $155M-plus in Southern California

Harrison Street acquired the portfolio; Anchor sourced it, did the due diligence, and is handling property management and leasing; and CBRE brokered the sale

9090 Wilshire (Blvd.) in Beverly Hills, Calif. (Photo courtesy of CBRE)

BEVERLY HILLS and SANTA MONICA, Calif. – Earlier this week, HREI became aware of a significant portfolio deal in Southern California that closed at a capitalization rate, or first-year estimated return, that was once considered unheard of in the medical office building (MOB) sales sector.

Cap rates for the highest quality, core property and portfolio transactions are taking place more and more often in the 3 percent to 4 percent range, and the recent sale of two MOBs – one in Beverly Hills and one Santa Monica – were indeed in the mid-3 percent range, according to industry sources.

Chicago-based Harrison Street Real Estate Capital acquired the portfolio of two MOBs with a combined total of 107,538 square feet that includes some life sciences space. Media, Pa.-based Anchor Health Properties worked with Harrison Street on transaction sourcing and due diligence, and is providing third-party property management and leasing services.

Confirmation of the sale comes from Christopher R. Bodnar, vice chairmen and co-leader of the U.S. Healthcare and Life Sciences Capital Markets team with CBRE Group Inc. (NYSE: CBRE), which represented the seller, Los Angeles-based Stockdale Capital Partners LLC. As noted in the preceding article, Mr. Bodnar is leaving his post at CBRE to co-founder a new HRE, life sciences and senior living investment firm, Prescriptive Capital.

Industry sources tell HREI that the price topped $155 million, or more than $1,440 per square foot (PSF), and that the cap rate, as noted, was in the mid-3 percent range.

“The offering went to market in late January and we went through several rounds of offers,” Mr. Bodnar says. “This was an incredibly competitive process. Pretty much every core buyer with healthcare allocations made a run at it. It’s very rare to be able to market a portfolio of this caliber.”

The facilities in the portfolio were the following, according to an offering memorandum from CBRE:

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