Ladera Ranch, CA Cypress West Realty Partners, a firm focused on the acquisition, development and management of healthcare properties in the Western United States, has announced the acquisition of a 23,280-square-foot two-story medical office building located at 22032 El Paseo in Rancho Santa Margarita.
Cypress West acquired the property, known as Mission Health Center, from PNC Bank for $7.8 million. Dan Vittone and Alan Pekarcik of Avison Young represented the seller. Built in 2001, the property is 77 percent occupied with a diverse group of medical and dental tenants including Mission Hospital and Lab Corp.
The acquisition puts the Cypress West portfolio at 321,000 square feet of healthcare properties located throughout the Western U.S. “We’ve completed six acquisitions in just eight months, taking advantage of strong opportunities in Southern California. This latest acquisition, and our first in Orange County, fits our focus, further building our presence in the highly sought-after Orange County market,” said Chris Cumella, principal, Cypress West. The firm was founded in 2013 and has moved quickly to build its medical office portfolio. According to Cypress West, the firm should wrap up approximately $100 million in transactions by end of 2014, with plans to acquire another $100 million in healthcare properties in 2015.
Cypress West’s principals have employed a strategic acquisition strategy that includes a solid base of core assets while targeting specific strategic value-add opportunities. The firm has been working to build a full-service niche in healthcare real estate, seeking product that meets its acquisition checklist. “We look at 18 key performance indicators which include both market demographics and property income stream metrics prior to investment in a healthcare asset. Mission Health Center scored very well in all of those indicators,” Cumella noted.
To that end, the Rancho Santa Margarita property benefits from an affiliation with Mission Hospital, superior market demographics, and a high traffic retail setting near Rancho Santa Margarita Town Center.
Going forward, leasing and property management will be handled by Cypress West through Cypress West Realty Management, Inc. “Our strategy for the property is to lease up the remaining space with complementary practices to further enhance the strong referral network already in place. Ownership has strong commitment to attract new tenants with generous tenant improvement allowances,” said Jeff Johnson, principal, Cypress West.
The partners noted that the need for medical office space located closer to or within retail centers and suburban areas is growing as individuals require services that are more geographically accessible, more personal, and generally more affordable. To accommodate this demand, there is expected to be a growing number of tenants identified as doctor’s offices, off-site ambulatory care centers for hospitals, urgent-care clinics, laboratories, imaging centers, outpatient surgery offices, among other uses.