G&E REIT Buys MOB for $30M

SALT LAKE CITY-Grubb & Ellis Healthcare REIT has acquired an 112,000-sf suburban medical office building here for $30.2 million. Known as Renaissance Medical Center, the five-story building is 88% leased.

Completed in 2004, Renaissance Medical Centre is located at 1551 S. Renaissance Drive on the outskirts of Downtown Bountiful, a suburb of Salt Lake City. The building is part of the 20-acre Renaissance Towne Centre mixed-use development on the former Five Points Mall that is under development.

G&E Healthcare REIT acquired Renaissance Medical Center from an RTC Montainwest Medical Building LLC, whose registered agent is Bruce V. Broadhead, managing member of the Renaissance Towne Centre development group, Town Center LLC. Chris Bodnar of CB Richard Ellis’ Colorado Private Client Group represented the seller.

G&E Healthcare financed the purchase with $20.1 million in borrowings through the assumption of two existing loans on the property. The loans are serviced by Midland Loan Services, Inc. and Wachovia Bank, N.A. The remaining cost was paid in cash. G&E Healthcare paid its advisor in the deal $906,000, which represents 3% of the total purchase price.

Danny Prosky, EVP of acquisitions for G&E Healthcare REIT, says the property is less than three miles away from Lakeview Hospital, a major regional medical center. “We believe this acquisition corresponds … with [our] overall Investment strategy [to focus] primarily on investments that produce current income.”

Renaissance Medical Center was built as an alternative to hospital surgery in order to reduce costs and also retain patients that had previously traveled to Salt Lake County for services. The building’s anchor tenant is MountainWest Surgical Center, which leases approximately 30,000 sf of the building. The area’s dominant orthopedics practice also operates out of the building.

Broadhead tells GlobeSt.com that he owned the medical office building in partnership with some of the doctors that operated within it and that the group decided it was time to sell for a variety of reasons. Broadhead’s company will continue to provide property management services for the G&E Healthcare REIT.

Broadhead continues to own some of the other 70,000 sf of development that has occurred and continues to move forward on the rest of the mixed-use development, a mix of office and residential over retail. He acquired the property eight years ago and began master planning the property. He broke ground for the first phase, the medical office building, two years after 9-11 and the first tenants moved in 2004 and 2005.

Since then Renaissance Towne Centre has grown to include a small office-over-retail building, a fitness center and a bank building, and Broadhead says he’s got the preleasing commitments in hand to break ground soon for another small office-over-retail building. That project will be followed by a multi-story residential-over-retail building that will include several hundred apartments above 17,000 sf of retail.