MISSION HILLS, CA—Healthcare properties can get pretty pricey in Southern California, causing some medical real estate investors to think twice about doing deals in the Golden State.

But it looks as if the country's largest owner of healthcare real estate (HRE), Toledo, OH-based Health Care REIT (NYSE: HCN) recently found a deal there that equates to well above $500 per square foot (PSF). According to Real Capital Analytics, the average price paid per square foot for medical office buildings (MOBs) nationwide in third quarter was about $250.

The publicly traded real estate investment trust (REIT) recently closed on the facilities for $200 million, acquiring the properties from Beverly Hills, CA-based G&L Realty Corp., a nearly 40-year-old firm that was once a REIT and focuses on owning, developing and managing healthcare-related properties.

Founded by Daniel M. Gottlieb and Steven D. Lebowitz, G&L Realty, according to its website, has holdings in California, Arizona, Nevada, Texas and Maryland. Prior to the sale of the MOBs to Health Care REIT, G&L had, according to a map of its properties, 14 MOBs, all of which are/were in California. In addition, the company stated that it owned five seniors housing facilities, three behavioral health hospitals and two retail properties.

G&L was an active seller back in 2005-07, when the company developed and sold a total of about 500,000 square feet of MOBs in California.

An official with Health Care REIT informed Healthcare Real Estate Insights^™ that the company does not comment on its acquisitions.

Here's a look at the properties, all in Southern California, that the REIT acquired from G&L. Pricing information came by way of real estate research firm Real Capital Analytics (RCA) Inc.

• Sherman Oaks Medical Plaza, 4955 Van Nuys Blvd., Sherman Oaks. The price for the seven-story, 74,491 square foot MOB was $40.5 million, or $550 PSF. Constructed in 1969, the facility is to the 156-bed Sherman Oaks Hospital and Health Center. G&L says it recently completed a $1 million capital improvement program to renovate the building systems, parking and common areas. 
• Lyons Avenue Medical Building, 24355 Lyons Ave., Santa Clarita. The price for the two-story, 50,899 square foot MOB was $26.6 million, or $519 PSF. Considered an “off-campus facility,” the MOB is about a half-mile from Henry Mayo Newhall Memorial Hospital. It was completed in 1988 and renovated in 2005.
• Holy Cross Medical Plaza, 11550 Indian Hill Road, Mission Hills. Situated on about 2.6 acres and across the street from the 390-bed Providence Holy Cross Hospital, the three-story MOB has 74,181 square feet of space and is adjacent to a 333-space parking structure. Health Care REIT paid $40.5 million, or about $550 PSF. The MOB was built in 1985 and renovated in 1993.
• Two MOBs on the campus of Henry Mayo Newhall Hospital, Valencia. Health Care REIT paid $92.4 million for the MOBs, which have a total of 178,000 square feet. The PSF was $519. Henry Mayo Newhall is a 241-bed medical center that underwent a $140 million expansion project in recent years that added a new 120 bed patient tower.

According to RCA, Jones Lang LaSalle was the broker on the portfolio sale.

John B. 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.