PMB, Harrison Street Plan 200K SF MOB in San Jose

San Diego-based PMB and Chicago-based Harrison Street Real Estate Capital are planning to build a new 200 SF medical office building on a 2.4-acre site in San Jose the developers purchased this month from West Bay Development for $26.2M in an all-cash deal.

The site at 1410 Bascom Avenue, adjacent to the Bascom Station light rail stop, is a portion of a triangle-shaped seven-acre property site where a mixed-use project known as Bascom Station is being built at the corner of South Bascom Avenue and Southwest Expressway.

In 2018, Forum Real Estate Group and Bay West bought the seven-acre site for Bascom Station for $37.3M. The partners have demolished the retail properties on the site, which included a Dick’s Center and a Greek restaurant known as Zorba, to clear the way for development.

Bascom Station will include a 590-unit residential building on a 4.6-acre parcel. The joint venture of Forum and Bay West has secured a $284M construction loan for the project rom AustralianSuper, one of Australia’s largest pension and retirement funds.

Founded in 1971, PMB is a full-service healthcare real estate developer that works with health systems, hospitals, medical groups, specialty providers, academic medical centers and senior living providers, according to a statement on its website.

Harrison Street has been very active in recent months buying and selling MOB portfolios.

At the end of May, Stockdale Capital Partners sold two medical offices in Los Angeles to manager Harrison Street for $156M. The MOB purchases included a 55K SF building on Santa Monica Blvd. that has UCLA Health as its primary tenant and a 49K SF property on Wilshire Blvd. that has a single tenant, Cedars Sinai.

The transaction price for the properties was nearly double what Los Angeles-based Stockdale paid for them in 2015, which was about $88M.

At the end of April, Harrison Street sold for $600M a portfolio of 1.2M SF of 27 MOB assets spread across 10 states to Canada-based REIT NorthWest Healthcare Properties. At the time of the sale, the portfolio was 97% leased.

In March, Harrison Street sold a 380K SF MOB portfolio encompassing eight buildings in Northern California for $215M.

Southern California also has been a hotbed of MOB trading activity in recent months. One of the highest profile acquisitions was Lionstone Investment’s $125M all-cash purchase of the Newport Lido Medical Center in Newport Beach.

The two-building, 147K SF campus is fully leased and adjacent to the 434-bed Hoag Hospital Newport Beach. JLL Healthcare Capital Markets represented the seller in the transaction.