La Quinta Medical Changes Hands

RIVERSIDE, CA—Newmark Grubb Knight Frank Global Healthcare Services has completed the $25 million sale of La Quinta Medical Center on behalf of Accretive Realty Investment, LLC. The buyer was a large real estate investment trust that specializes in the healthcare sector.

The sale price equates to a capitalization rate of approximately 6%, underscoring the asset's high quality and excellent location in the fastest-growing portion of the Coachella Valley. The property, located at 47647 Caleo Bay Drive a mile south of Highway 111, was 98% occupied when the transaction closed.

Garth Hogan and Todd Perman, CCIM, both executive managing directors with NGKF Global Healthcare Services, represented Accretive Realty in the sale.

The deal marks NGKF Global Healthcare Services' fourth disposition for Accretive Realty in Southern California over the past year, following the sales of three medical office buildings in Orange County that collectively garnered $41.4 million in separate sales to an unnamed private equity fund beginning in October 2013.

“This is an unbeatable location with great visibility from Washington Street, with more than 200,000 Valley residents living in the immediate market area and 35,000 cars passing the building every day,” Hogan said. “Accretive Realty had a first-rate property to sell in an up-and-coming, high-end market, and the buyer decided that combination merited the $600 per foot price for the asset.”

Accretive Realty acquired the two-story La Quinta Medical Center as a value-add opportunity in 2007, when it was 25% leased. Following strong asset management and leasing programs deployed by Accretive Realty, the property was nearly 100% occupied at the time of sale, with a tenant roster that included three clinics affiliated with Desert Regional Medical Center: the Comprehensive Cancer Center, Institute of Clinical Orthopedics and Neurosciences, and La Quinta Imaging.

Accretive Realty's three other recent medical office sales in the region followed repositioning programs that substantially boosted the value of each property. Those properties, which closed in the fourth quarter of 2013 at mid-to-low five cap rates, included Oceanview Medical Center in San Clemente, Pacific Park Medical Dental, and Aliso Viejo Medical Center, both in Aliso Viejo.