Earnings, Sales Show Medical Office Strength

Pasquale pointed out that the emphasis in the financial community today is on reducing debt and maintaining liquidity, a course that Nationwide has pursued, and the company recently earned credit rating upgrades from Moody's and Fitch."On an enterprise value basis, our leverage is a conservative 40% and we have ample liquidity with about $80 million of cash and the full capacity of our $700 million credit facility," Pasquale said.

quarterThe REIT, which sold three buildings in the first to generate approximately $35 million in gross proceeds, remains on the lookout for acquisitions and believes that "the investment environment favors patience," according to Pasquale. "In time we believe that assets will be available at attractive prices, and we expect to make excellent investments as opportunities present themselves," the Nationwide chief added.

Nationwide's revenue on a year-to-year comparison grew to $97.2 million in the first quarter versus $85.2 million last year, with diluted FFO rising more than 9% to $61.5 million and FFO per share rising a penny to 57 cents. Net income rose nearly 39% to $49 million, with net per diluted share rising 10 cents to 47 cents.

Nationwide's conference call came at roughly the same time that New York City-based Corcoran Wexler Healthcare Properties reported that one of the firm's recent medical office transactions tops $1,100 per square foot. Despite the recession, healthcare is one sector of commercial real estate that has remained active so far this year, the brokerage reported, with medical office sales and leasing activity continuing to be reported from markets nationwide.

Corcoran Wexler noted the sale of a medical office suite at the 3 Dag Hammarskjold Plaza Building for a price of $8.5 million. The 16,400-square-foot suite, located in a 12-story building at 305 East 47th St. in the Upper East Side, will house medical office space and an ambulatory surgery center that will serve a variety of specialties including plastic surgeons.

Corcoran Wexler also handled the sale of a 1,200-square-foot medical office suite at the 21-story, 799 Park Ave. building a 10-year lease for a 1,500-square-foot suite in one of New York's most prominent new buildings on Columbus Circle, directly adjacent to the headquarters for Time Warner Inc., and a transaction was for several vascular surgeons who bought a 1,400-square-foot office at 1115 Fifth Ave.

Paul Wexler, president of Corcoran Wexler, cites a sampling of other recent medical office transactions from across the country, including a 17,000-square-foot medical facility that sold for $1.5 million and a 16,940-square-foot office building that sold for $2.4 million. "Although healthcare real estate is not recession-proof, the demand for high-quality healthcare facilities continues to be strong" Wexler says.