Medical Office Complex Fetches Over $53M

The complex was built between 1967 and 1983 and is located on a 14.3-acre site at 220, 222, 226, 230 and 244 Westchester Ave. Robert Weisz, president of RPW Group, notes that the property fetched a record price per sf, which he attributes to the complex's location and the fact that medical office space usually sells at a premium. The sale also includes a pad site that has the approvals to build up to a 71,854-sf four-story building at 250 Westchester Ave. The complex is currently 97% occupied.

[IMGCAP(2)]Weisz says that his firm felt it was "the right time to sell" and is in the midst of transforming his real estate development firm into a company that concentrates on the ownership and management of large commercial office properties. Some of the firm's larger holdings include: the former Altria Group complex in Rye Brook, a former IBM complex at 1133 Westchester Ave. in White Plains, two properties that each contain more than 600,000 sf of office space, and 440 Mamaroneck Ave., a 223,000-sf office building.

"The final results of the sale demonstrate the fact that pricing is still moving upward for good quality assets," Weisz says. "In a real estate market where there is simply not an abundance of product available for purchase, the offering drew strong interest from the investment community."

Andrew Merin, vice chairman, and Gary Gabriel, executive vice president, of Cushman & Wakefield's Capital Markets Group, along with Glenn Walsh, senior director and Tom O'Leary, senior director, in Cushman & Wakefield's Westchester/Fairfield County region, represented the seller and procured the purchaser in the transaction.

ProMed plans to further develop this medical campus into the dominant medical office destination within Westchester County, says Roni Soffer, president and CEO of ProMed Properties. He says that the firm has plans to develop 250 Westchester Ave., but has not determined the size of the building as yet. He explains that in the next few months the company will figure out what it wants to do moving forward in terms of its available land as well as possible capital upgrades to the complex.

Soffer says that the firm will likely look to secure an anchor tenant, for example a firm that is a dominant healthcare provider, before it looks to build another building on the property. ProMed Properties Group owns approximately one million sf of medical office space and medical research buildings, with a majority of its portfolio in the Northeast. Other notable holdings include the Hackensack Medical Center in Hackensack, NJ and 3535 Market St. in Philadelphia.

ProMed Properties states that it funded the Harrison Court Medical Center purchase via available cash, new debt and assumption of existing debt. The firm estimates the unleveraged return on the existing campus, after leasing and operational improvements are factored in, is approximately 7%.