The Phoenix Kidder Mathews healthcare team continues to capitalize on the robust medical office building market in the West Valley, representing the sellers in the disposition of three assets in the second quarter of 2021 totaling $32.85 million.
Kidder Mathews sold the properties within six weeks of each other after getting them each to, at least, 97 percent occupancy. Two were conversions to medical; one was a single-story, garden-style medical office campus.
The team of Senior Vice President Michael Dupuy and Vice President Rachael Thompson represented the sellers in each instance.
“All three of these projects are strategically located with great drive-up and building signage options,” Thompson said. “The medical market is seeing an increase in the demand for buildings like these: excellent payor mix, easy access to main roads/freeways and well maintained. Patients and tenants gravitate to buildings like these.”
A noteworthy trend is the conversion of retail centers to medical office. Last year Kidder Mathews started the process of leasing up Cornerstone Medical Center, a 20,235 SF repurposed Maytag appliance store in Goodyear on behalf of Whiteboard Development.
Within 14 months, the project was fully leased with tenants competing for the final spaces. Tenants included Cigna, ResCare, Valley Sleep Center and the Center for Autism and Related Disorders (CARD). The project was built by Colin Brown of Whiteboard Development Co., his third retail-to-medical office conversion project in Greater Phoenix.
“Identifying soft spots in the market is one thing, but you have to do your homework up front on the physical asset itself because not every retail or office property is equipped to be a medical office building,” Brown said.
The asset is strategically located in Goodyear, one of the West Valley’s fastest growing communities. It offers a quick two-minute drive to the I-10 freeway, providing easy access to housing, entertainment and retail.
The Abrazo West Campus is located within walking distance and the project is not encumbered with any use restrictions.
“The buyer profiles for each of these deals were unique. The buildings, however, were more similar in the fact they were all located in the West Valley, well-designed and well- leased. We’ve seen strong interest from investors that historically owned other product types,” Dupuy said. “Demand is high for medical office. An aging and growing population in Metro Phoenix continue to support this. There’s more to come.”
• Cornerstone Medical Center, 20,235 SF, $7.65 million, Goodyear, Arizona;
• Talavi Medical Plaza, 35,893 SF, $10 million, Glendale, Arizona;
• Thunderbird Palms, 52,013 SF, $15.25 million, Glendale, Arizona.