The market for medical office buildings (MOB) showed plenty of activity in 2020, and that doesn’t seem to be slowing down in 2021. According to search results in our Healthcare Deals Database, there have been 18 transactions announced since January 1, driven primarily by announcements from Montecito Medical Real Estate, which reported nine of those deals.
Montecito Medical, one of the largest privately-held companies specializing in healthcare-related real estate, added nearly 350,000 square feet in property across eight states. One of the most notable purchases was for a three-story, 91,300 square-foot facility in Sandusky, Ohio. The property is 100% leased to Northern Ohio Medical Specialists, a regionally dominant multispecialty practice. The building was constructed in 2009 and significantly enlarged with the major addition of an ambulatory surgery center. The Sandusky location serves as a hub for 24 different specialties. In Shreveport, Louisiana, Montecito bought two MOBs, which together encompass more than 61,000 square feet and are 100% leased to Regional Urology. The buildings include clinical space, an ambulatory surgery center, an imaging center, a lab/research space, and a pharmacy.
A number of physicians within the group reinvested a share of the sale proceeds back into the property, retaining an ownership stake that will generate tax advantages and monthly income streams going forward. As Louisiana’s third-largest city, with approximately 450,000 people in its MSA, Shreveport is a major medical hub for the entire Ark-La-Tex region.
Another prolific buyer has been White Oak Healthcare MOB REIT, which has four transactions on the books, adding more than 265,000 square feet across seven states. In Minnesota and Ohio, the REIT bought three Class-A properties in Ohio and one in Minnesota. The Minnesota property is The Fischer Laser Eye Center and the attached surgery center and is located in Willmar, Minnesota. The three facilities in Ohio are located in the greater Cleveland area and include the Chardon Surgery Center in Chardon, the Parschauer Eye Clinic in Sandusky and a multi-tenant building anchored by Southwest Urology in Middleburg Heights. No terms were disclosed for either of these deals.
