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OrbVest recently sealed the purchase of another highly-desirable medical office building, Congress Executive Center (Medical 39) in Boynton Beach, Florida, in the US. The building was acquired for $12.6 million, including $1.56 million as a provision for tenant installation and transaction costs.
The property, which is 100% tenanted with 12 tenants, is 40 210 square feet in size on 1.92 acres of land. It is in good condition, having last been renovated in 2014, with a new lobby and new elevators.
OrbVest plans to hold it for five years, during which it will renew expiring leases of existing health care tenants. When the leases of non-health care tenants expire, it will seek to replace them with health care businesses. Major medical tenants in place include TLC Women’s Health, Maxim Healthcare Group and QC Kinetix.
This is a perfectly-situated property for anyone in the medical sector, as it is close to Bethesda Hospital East (418 beds).
The ability to improve the tenant mix puts this property in OrbVest’s category of “value-add” real estate, meaning it presents slightly more risk than “core” real estate, but is less risky than equities in general.
The demographics of the area are highly favourable. Palm Beach, Miami-Dade and Broward Counties, which are in close proximity, are together the eighth-most populous area in the US, with 6.2 million residents, about one-third of Florida’s population. Palm Beach is also one of the wealthiest counties in the US. A recent survey by Redfin.com ranked Miami as the top destination that home buyers were looking to move to in Q4 2021, based on criteria such as job opportunities and climate.
OrbVest is the sponsor of this deal. Lincoln Harris, with whom OrbVest has partnered on previous projects, will manage the property and the leasing.
“We believe that healthcare-related commercial real estate in the US should continue its growth as an ageing population and technological progress drive increasing demand for these specialized buildings,” says OrbVest CEO Martin Freeman. “We are very excited to be executing successfully in this rapidly-growing space.”