Parkway Sells Two-Building Medical Complex

BEACHWOOD, OH-Parkway Medical Center LLC has sold its two-building office park of the same name to Grubb & Ellis Healthcare REIT II for $10.9 million. The 88,000-square-foot property is 87% leased to 35 tenants, including University Hospitals of Cleveland, Rapid Medical Research, The MetroHealth System and ID Consultants, according to the trust.

Danny Prosky, president and COO of the trust, tells GlobeSt.com that this suburb of Cleveland has seen exploding growth for health care. “The lease-up of the building is a good indication of demand, plus a brand new hospital is almost complete nearby,” Prosky says. The center on Park East Drive is just a half-mile from the 53-acre Ahuja Medical Center being developed by University Hospitals, and about 10 miles from the Cleveland CBD.

The larger of the center’s two buildings, about 51,000 square feet, was built in 1972, while the smaller building was built in 1987. The former owner spent about $1.6 million in capital improvements since 2004, including upgraded lobbies, hallways, parking lots, roofs, hvac and lighting.

Prosky says the trust is targeting attractive, performing medical-related assets near significant medical campuses. The REIT has already purchased properties near Cleveland, New Orleans and St. Cloud, MN, and is looking at a potential fourth acquisition near Denver. “It’s everyone’s general consensus that the recent health care reform will be a big benefit as more insured individuals are brought in. They’ve seen tremendous increases in occupancies in Massachusetts once they passed a universal health care system,” Prosky says.