MedProperties Holdings LLC adds Ohio MOB
A recently-formed partnership of MedProperties Holdings LLC and Equity Inc. has acquired the Evendale Healthcare Center medical office building (MOB) in suburban Cincinnati.
MedProperties Holdings, a Dallas-based healthcare real estate private equity investment firm, and Equity, a Columbus, Ohio-based commercial real estate company with offices in Cincinnati, closed on the off-market transaction June 7.
The four-story, 65,670 square foot Evendale Healthcare Center was constructed in 1988 on 4.6 acres of land at 10475 Reading Rd. in Evendale, Ohio. The multi-tenant MOB is located between Interstate Highways 71 and 75, near the intersection of Reading Road and Glendale Milford Road.
This is MedProperties' second transaction with Equity and its third investment for its recently launched second investment fund, MedProperties Investment Partners LP. The investment banker for the acquisition was Hunter Beebe from Healthcare Real Estate Capital.
"The Evendale Healthcare Center acquisition is part of our planned expanded strategic relationship with Equity," MedProperties Managing Principal Darryl E. Freling says. "We are very happy with the success of our partnership to date with such a high-quality, experienced commercial real estate firm."
The partners closed in March on their first joint venture, the acquisition of the five-story, 103,000 square foot Atrium Medical Center MOB in Middletown, Ohio. Equity is providing leasing and property management services for the Atrium Medical Center, and property management for the Evendale Healthcare Center. Leasing for Evendale will be provided by Republic Commercial Real Estate.
"The Evendale acquisition is a great fit with MedProperties' portfolio investment strategy of targeting ground-up development and value-added acquisitions," MedProperties Managing Principal Roman J. Kupchynsky II explains. "We especially like this asset because it is in a strong, growing market and has tremendous upside. We acquired the building for less than replacement cost, and look forward to making it an even better facility with some long-needed modernization, renovations and improvements."
MedProperties and Equity have initiated a capital improvement plan that calls for an investment of at least $2.5 million to renovate the lobby and common areas, make exterior cosmetic improvements and modernize the building's systems, including replacement of the heating, ventilating and air conditioning (HVAC) system. These improvements, in conjunction with a generous tenant improvement loan facility provided by GE Capital, has already - and will continue to - improve tenant relations and attract new prospective tenants.
In fact, since placing the building under contract, MedProperties and Equity have already boosted the building's occupancy by about 20 percent, and negotiations are underway which should soon bring it to about 85 percent leased.
"Our continued partnership with MedProperties on the Evendale Healthcare Center MOB is another example of a strategic, value-added transaction that translates into a win-win for the citizens and physicians in this growing community," says Hal Augur, chief financial officer for Equity.
The Evendale Healthcare Center MOB offers a diverse array of services and mix of physicians, with specialties including primary care, podiatry, gynecology, general surgery, dental specialists and an ambulatory surgery center (ASC). The MOB's suites range in size from 987 to 14,739 square feet, and it offers ample parking and easy access for patients and physicians to and from I-75, I-71 and I-275.
