SANTA BARABARA, CA-A new joint venture has big plans for making healthcare real estate investments over the next three years.

As is the case with many JVs looking to make a headway into medical real estate, this one involves a company with experience in the sector, local Montecito Medical Acquisition & Development Co., and one with plenty of capital to invest, Boston-based Berkshire Realty Ventures, which has a long history in multi-family properties and hotels. The JV, which is called MMAC Berkshire LLC, certainly has big plans, as it is looking to spend from $700 million to $1 billion on medical facilities purchases and developments.

According to a rough estimate by Chip Conk, CEO of Montecito, about 80% of the capital will be invested in acquisitions with the remainder being spent on development, most likely through providing capital for projects spearheaded by local or regional development companies with hospital relationships.

MMAC Berkshire LLC recently added to its acquisition goal, partnering with Orlando, FL-based CNL Healthcare Properties on the $19.8 million purchase of Claremont Medical Plaza in Claremont, CA. The two-story, 48,984 square foot medical office building was built in 2008 specifically for the Pomona Valley Health System.

As noted, Montecito has plenty of experience in the medical office building sector, as the entity, which was launched by the founders of Montecito Property Co., started acquiring properties in 2006 and, over two years, accumulated a portfolio exceeding $500 million. The private company made some of the purchases with equity partners such as Buchanan Street, Clarion Capital Partners LLC and Harrison Street. When the economy went south in 2008, Montecito stopped buying and focused on managing its portfolio, selling some assets along the way.

Now however, Conk says Montecito has gotten back on the investment playing field because of the emerging importance of off-campus outpatient facilities to the delivery of services. Though many observers say there are not enough medical facilities on the market to meet the demands of hungry, well-capitalized investors, Conk says the JV has a strategy.

“There is a lot of competition out there, but if you have the right relationships with the growing health systems – and/or with the regional developers who have relationships with health systems, like we do – then we do think making $250 million or more worth of investments each year over the next three years is quite feasible,” he says.

Montecito also plans to continue to tap into data provided by its research firm, Montecito Research and Analytics, which, according to Conk, can pinpoint exact locations where new facilities – both hospitals and outpatient centers – should be built to experience optimum success. The research firm, by the way, indicates a need for 70 million square feet of new medical space nationwide.

Even though its focus will be mostly on MOBs, MMAC Berkshire LLC also plans to invest in cancer centers and other facilities considered important aspects of the healthcare industry's new focus on the hub-and-spoke delivery model.

John Mugford is the Editor of Healthcare Real Estate Insights, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.