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[IMGCAP(1)]ESCONDIDO, CA-A joint venture of Montecito Medical Investment Co. of Santa Barbara and Harrison Street Real Estate Capital of Chicago has acquired a 50,020-sf medical office building here for $16.8 million, and Pacific Realty Advisors has closed a separate medical office deal in Chula Vista for $8.8 million as Southern California medical office properties continue to be a hot commodity with investors. The new Montecito Medical asset is the Escondido Medical Arts Building at 225 Second Ave., which the Montecito-Harrison JV bought from Escondido Medical Arts Associates. The Chula Vista property is Pacific Doctors Park, a 35,000-sf medical campus at 340-342 Fourth Ave.

The Escondido Medical Arts building is a two-story, cass A asset that was built in 1994 and is 95% leased to 14 tenants, according to Craig Romer of Delray Beach, FL-based Dockerty Romer & Co. Romer arranged a $10.7 million, five-year nonrecourse loan from Wells Fargo Bank as acquisition financing for the purchase. Romer notes that despite the turbulent credit markets, the financing closed within three weeks of the time Wells Fargo was presented with the deal.

The acquisition by Montecito and Harrison follows an announcement by the two firms last fall that their venture plans to acquire and develop a portfolio with a value of more than $500 million in a period of two to three years. The Escondido Medical Arts property, situated close to the 319-bed Palomar Medical Center, also includes a covered parking garage for 241 vehicles. Buyer Montecito Medical owns medical office properties totaling more than 1.5 million sf and in excess of $500 million in valuation.

Chip Conk, CEO of Montecito, comments that the acquisition “met our key investment strategy because it is located within a growing medical market that is currently underserved by the number of physicians available to treat patients.”This latest acquisition brings to 38 the number of medical office buildings that MMIC has acquired in the last 22 months.

[IMGCAP(2)]In the Chula Vista deal, Pacific Realty Advisors acquired fully leased Pacific Doctors Park from Dr Park LLC. San Diego-based Pacific Realty, with James T. Gianulis and Richard C. Dentt as general partners, plans extensive improvements to the interior and exterior of the campus.

Gianulis says that the buyers liked the project’s stable South Bay location, an area where supply is limited and demand is high, and its proximity to Scripps Mercy Hospital, one of only two hospitals in the area. According to Dentt, multi-tenant medical space will continue to be in high demand, especially in the South Bay communities where population is expected to increase by 17% by 2020.

Pacific Doctors Park is occupied by 20 tenants. Pacific Realty represented itself in the acquisition, with the seller represented by Tracy Clark of Voit Commercial.

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