Two major things become quite clear to large investors who decide to enter the healthcare real estate sector: first, high-quality medical office buildings (MOB) are typically in short supply; and second, even the largest deals carry price tags that pale in comparison to big general office transactions.
Yet, the MOB sales sector saw some impressive deals in 2013, as most of the largest transactions involved the trading of portfolios.
Here's a look at MOB portfolio sales from 2013 that topped $100 million.
- WRIT Portfolio, $307.29 million. Washington Real Estate Investment Trust's (WRIT) sale of its entire MOB portfolio – all based in the Washington, DC, metropolitan area – to Chicago-based Harrison Street had a total price tag of just more than $500 million. However, because the sale took place in tranches, just 17 buildings and a developable site traded hands between the two entities in 2013. Harrison Street closed on the remaining properties, totaling nearly $200 million, in early 2014. The properties that closed in 2013 had a total of 861,792 square feet, for price per square foot (PSF) of $356. Cassidy Turley represented WRIT in the deal.
- Dux Portfolio, $295.7 million. Newport Beach, CA-based Griffin-American Healthcare REIT II acquired the 16 facilities from Duke Realty Corp. (NYSE: DRE), which considered the properties “non-core” medical assets. The 16 properties are in Indiana, Michigan and Ohio. They have a total of 887,669 square feet of space, making the PSF $333. The sales price, which was not released by Duke, was obtained from data supplied by Real Capital Analytics (RCA). New York-based Savills represented Duke Realty.
- LaSalle MOBs, $206 million. The 13 buildings in the portfolio have a total of 785,092 square feet of space and are located in seven states. New York-based ARC Healthcare Trust, an unlisted REIT, acquired the MOBs from LaSalle Investment Management, with JLL Healthcare Capital Markets acting as the broker. The PSF was $262.
- Crystal Run MOB Portfolio, $141 million. Griffin-American Healthcare REIT II acquired the six buildings from a large, dominant physicians group, Crystal Run Healthcare, which is based in the Mid-Hudson River city of Middletown, NY. The PSF was $392 for the 360,000-square foot portfolio. Raymond James' healthcare group of New York represented Crystal Run.
- Central Indiana MOB Portfolio, $123 million. Griffin-American Healthcare REIT II was also the buyer of this 17-building, 594,000-square foot portfolio, which it acquired from Indianapolis-based Cornerstone Cos. and other firms. The PSF was $207.
- Dignity Health MOB Portfolio, $114 million. Denver-based NexCore Group LP and financial partner Heitman acquired the 13 Southern California and Arizona properties, which have a total of 594,000 square feet, from JLL Income Property Trust for a PSF of $207. The Healthcare Capital Markets group of CBRE (NYSE: CBG) represented the seller.
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