The Warner Village Medical building, which is at 10900 W. Warner Ave., is one of a number of medical office facilities in Orange County that have traded this year. One of the largest deals, reported in the first quarter of this year on GlobeSt.com, also involved Marcus & Millichap and was one of the largest medical office portfolios to trade in the region in some time.
In that deal, Jamison Services of Los Angeles added 198,000 sf of medical office buildings with the $30.3-million acquisition of a five-building portfolio that sold in 10 days for a record cap rate, according to Marcus & Millichap's John Smelter of the company's San Diego office. Smelter, who brokered the deal, told GlobeSt.com at the time that the cap rate of 5.8% cap rate was believed to be a record for a multi-tenant non-credit medical office building sale.
Orange County investment properties of virtually all types remain among the most popular in the country, according to recent research by Marcus & Millichap. Hessam Nadji, an SVP and director of research at the company, told GlobeSt.com in a recent interview that "The fundamentals in Southern California are basically stellar," and Orange County is one of the strongest markets within Southern California.
As reasons for the positive outlook, Nadji's study cited job growth, strong rents and absorption, and projections for continued demand. However, the Marcus & Millichap research chief cautioned against adopting too rosy an outlook, citing the prospect of higher interest rates that could reduce investor returns.
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