Traditional Office Buyers Looking at Medical Plazas

As the potential for growth in healthcare increases, investment firms are acquiring medical plazas as a distressed investment. Colombia Medical Plaza in West Palm Beach FL was recently purchased by Dallas-Based Velocis West Palm, LP.

By Jennifer LeClairePalm Beach

PALM BEACH, FL—Columbia Medical Plaza, 43,797-square-foot medical office park at 4700 North Congress Avenue in West Palm Beach, FL, has traded hands. Dallas-based Velocis West Palm, LP acquired the medical office asset from Jupiter, FL-based FLF Columbia, LLC for $5.702 million.

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“We received a tremendous amount of interest from investment firms that have historically focused on traditional office assets but, like this buyer, are increasingly allocating equity toward medical office buildings in South Florida,” says Scott O’Donnell, senior vice president with CBRE’s Private Capital Group in Boca Raton, who represented the seller. “Positive demographic trends, such as the continued in-migration of seniors to the region, makes this type of asset extremely attractive to investors.”

Built in 1987, Columbia Medical Plaza is located directly across from the 250-bed West Palm Hospital, owned by Hospital Corporation of America. The healthcare real estate was 84% occupied at the time of the sale.

The owner acquired the medical office property as a distressed asset—with occupancy below 50% in 2010 and subsequently implemented a successful repositioning strategy that included $800,000 in capital improvements. O’Donnell says, “The seller was handsomely rewarded when he sold the asset for nearly double the initial investment.”

CBRE's local leasing, Private Capital Group, and national Healthcare Capital Markets Group collaborated on the sale. O’Donnell, Dominic Montazemi and Miguel Alcivar, all with CBRE’s Private Capital Group in Boca Raton, marketed the property with assistance from Jason Hochman of CBRE’s Debt and Equity Finance group in Miami; Chris Bodnar, with CBRE’s Healthcare Capital Markets Group in Denver; Lee Asher with CBRE’s Healthcare Capital Markets Group in Atlanta; and Jeff Kelly and Robert Smith, CBRE leasing professionals based in Boca Raton.


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Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

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