Medical Buildings Attractive to Investors

Gluckman says the average medical building build out is $35 to $45 per sf. Evidence of this trend is seen in the recent sales of buildings in Houston and the south Texas city of Victoria. A medically-oriented company bought the Houston building while the Victoria building is an existing medical facility.

Galveston-based insurance company Westcap Corp. recently sold its 58,000-sf office building at 2575 West Bellfort in Houston to DNA sequencing company, Seawright Inc. Houston-based Seawright plans to occupy part of the building for their operations and lease out the rest.

Constructed in 1984, the building was the former headquarters of Stage Stores. After declaring bankruptcy, Stage moved out of the building in the Spring of 2000. Westcap foreclosed on the building and subsequently put it up for sale.

Gluckman represented Westcap in the transaction. W. Derrell Curry and Mark O'Donnell, also of the Houston office of CB Richard Ellis represented Seawright in the deal. The brokers won't disclose the sales price, but the asking price for the building was $3.5 million. Gluckman says the building was attractive to the buyers because of its proximity to Houston's Medical Center.

A 55,437-sf medical building at 6502 Nursery Drive in Victoria was sold to California-based investment group La Nova Partners. T and F Properties, LP, a subsidiary of Boston-based medical REIT, Meditrust sold the building. Gluckman represented the seller in this deal as well.

Gluckman says Meditrust is liquidating parts of its medical portfolio. The building is 88%-occupied and was constructed in 1996. The advertised asking price for the facility was $4.2 million. The buyers used in-house representatives to close the deal. Gluckman says there were a number of full-price offers on this building, confirming interest in this product type.