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YAKIMA, WA-Unico Properties Inc. of Seattle has acquired control of two medical office buildings adjacent to Yakima Valley Memorial Hospital for $14.3 million. The buildings total 80,000 sf and are master leased by Yakima Valley Memorial Hospital.Unico, which controls a 6 million-sf portfolio, is in the process of diversifying its holdings, which have heretofore been heavily weighted toward CBD office buildings. With the Yakima acquisition, the company now controls four medical office buildings with 250,000 sf of rentable space. Unico’s VP of investments Jonas Sylvester tells GlobeSt.com that Unico is leasing the dirt long-term from Yakima Valley Memorial Hospital, which sold it the buildings and has master leased them back. It’s not a true sale leaseback, he says, because the leaseback is much shorter than the ground lease.The term of the ground lease is 60 years. Sylvester didn’t get specific on the term of the hospital’s leaseback, but says that when the initial term on the hospital’s master lease expires, the hospital will have the option of renewing the lease. If they opt out, then Unico assumes the in-place leases, which include about a dozen third party physician practices.Though the Yakima buildings are 100% master leased by the hospital, the buildings’ physical occupancy is about 90%. Sylvester says the hospital is purposely holding suites open with hope of attracting certain types of physicians that will best complement its operations. Because of that situation, both sides decided the best way for the hospital to maximize its sale proceeds was to master lease the building, at least for the near term.Sylvester landed Unico’s first medical office property in January, paying $10.8 million for a 64,000-sf, multi-tenant mid-rise on MultiCare Health System’s Allenmore Hospital campus in Tacoma. The Allenmore Building B, as it is known, sits on six acres, which will allow Unico to develop an additional 40,000-sf building on the site; the building has been preleased in part by MultiCare and is slated for completion in early 2007. In April, Unico Properties acquired Stevens Pavilion, a fully leased 74,000-sf class A building on the Stevens Hospital campus in Edmonds, WA. The three-year-old building sits on a long-term ground lease from Stevens Hospital. Unico paid an entity of Teutsch Partners $18 million for the building. Stevens Hospital held an option to purchase the building from Teutsch and now has an option to purchase it from Unico in 2015. Paul Carr and Steve Perovich of CB Richard Ellis in Seattle represented Unico in two of the three acquisitions. GVA Kidder Mathews broker Bill Frame represented Unico in the Allenmore acquisition.Looking ahead, Sylvester says it has two ground-up medical office buildings in the development pipeline. Sylvester says one of the developments is associated with one of its previous acquisitions — presumably the aforementioned 40,000-sf building on the Allenmore campus — and the other is not associated with any of its previous acquisitions. When those two projects are complete and stabilized, Sylvester says Unico’s medical office building portfolio will be worth close to $100 million.In addition to medical office, Unico is also acquiring and developing multifamily properties and additional office properties. To gather cash for the effort, Unico last year lowered its stake in a stable of CBD office buildings from 100% to 25% while maintaining the management contracts.

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