AUSTIN-Within months of completing construction on a 60-bed, 66,095-square-foot rehabilitation hospital in South Austin, north Texas developer JayRyCo Development sold the medical office building, known as Reliant-Austin, for $30.6 million. Though the buyer name wasn’t officially announced, area sources note that Nashville-based Healthcare Realty Trust ended up with the asset, which is 100% leased to Reliant Hospital Partners LLC.
The rehab hospital opened last summer, is situated on 4.1 acres at 330 W. Ben White Blvd. and is near St. David’s South Austin Medical Center, South Austin Cardiac Rehab, Austin Regional Clinic and Texas Oncology South Austin. Toby Scrivner, Jeff Matulis and Karen Vinsko of Stan Johnson Co.’s Tulsa office represented the seller.
Scrivner tells GlobeSt.com that Stan Johnson targeted the facility’s marketing to a core of specific healthcare buyers – because the Reliant-leased properties have to go through a variety of certifications during their first year in facilities, the developer typically discounts the rental rate, with the idea that it’ll be made up in following years. “Investors that require a strong return in the first year were out,” Scrivner explains. Despite that restriction, three prospects came out of the marketing process.
“We zeroed in on the buyer because of the willingness and understanding of the net lease structure, and its comfort with Reliant as an operating partner,” Scriver comments. “They were flexible in underwriting the asset and aggressive in the pricing.”
Scrivner says Reliant Austin is the forth Reliant-operated property Stan Johnson has brokered within the past handful of years, with the others located in Houston, Dallas and Richardson. There was a lot of difference between the recent sale and the disposition of the other properties, which took place in 2009. “At that time, we were deep in the recession and it was more difficult to transact,” Scrivner says.
These days, however, the specialized service line among medical office buildings is something that is sparking interest. With health care reform likely to charge ahead with little political opposition, Scrivner and others point out that consolidation will be the norm. As such, the value of the real estate increases. Scrivner says more interest was received for Reliant Austin than for the other properties marketed.
In addition, “Reliant is picking up development plans again,” Scrivner says, adding that Stan Johnson Co. is working with the developers that are building the facilities. However, “we’re about a year away from any sort of completion,” he says.