HTA Gets $51M Medical Office in Off-Market Deal

By Natalie Dolce

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Developed, owned, and operated
since 2007 by a group of independent
physician investors, the St. John
Providence MOB is currently 99% leased.

NOVI, MI-Healthcare Trust of America Inc. has completed acquisition of an approximately 203,000-square-foot on-campus medical office building, called St. John Providence MOB, in an all-cash transaction for approximately $51.3 million. The addition of the asset increases HTA's national presence into 26 states. 

The on-campus St. John Providence MOB is connected directly to the Providence Park Hospital through an enclosed walkway. The Providence Park Hospital is part of Ascension Health Systems.

Developed, owned, and operated since 2007 by a group of independent physician investors, the St. John Providence MOB is currently 99% leased. Mark Engstrom, EVP of acquisitions, tells GlobeSt.com that this transaction was an off-market transaction, with no brokers, that was brought directly to HTA through its healthcare industry relationships. “This was a great opportunity for us to work directly with the group of independent physician investors,” he says.

There were no other competitors, he explains. “It was a timing issue,” he says, in terms why it was for sale. “They had a loan coming due and were looking at refinancing versus selling.”

The Signature Group will serve as a local point of contact and leasing agent for the asset's tenants, and HTA's Indianapolis office will be responsible for overall asset management.

Engstrom also tells GlobeSt.com that the medical office building and hospital are “very new,” which he says is very attractive to an institutional buyer like HTA.

The acquisition “allows HTA to expand its existing relationship with Ascension Health Systems while providing channels for future growth,” says HTA in a statement. HTA currently has total assets of approximately $2.4 billion based on purchase price, consisting of approximately 11.5 million square feet with overall portfolio occupancy of 91%.

HTA remains committed to acquiring high quality MOBs located on or adjacent to nationally recognized healthcare system campuses with the potential for long-term value appreciation, according to a prepared statement.

Engstrom explains that this particular area in Southeast Michigan has a lot of potential. “It’s been an economy that has been off the radar screen for a while, but we think there is yield there,” he says. “We are looking to grow our portfolio in that marketplace.”

Categories: Midwest, Medical Office, Acquisitions/Dispositions, Chicago, Detroit