Dealmaker: IPA Closes $42M in Medical Office, Multifamily Deals

Institutional Property Advisors, Ontario, Calif., sold Dumfries Health Center, a 99,700-square-foot medical office building in Dumfries, Va., for $19.25 million.

Dumfries Health Center

Constructed in 2009, Dumfries Health Center is a healthcare facility serving active and retired military personnel throughout the Washington, D.C. region. Spectrum Healthcare Resources occupies the single-tenant building on a long-term lease.

“Medical office continues to be a highly sought-after asset class, however, with ever-changing trends in the healthcare sector, government-backed, third-party operators are becoming a new trend and add a further layer of security for investors,” said IPA Vice President of Investments Randall Heilig. He noted this trend and the asset’s proximity to Marine Corps Base Quantico made it a good opportunity for buyer Global Medical Real Estate Investment Trust, Bethesda, Md.

IPA First Vice President of Investments Robert Filley said he believes the industry will see more large-scale, contractor-run medical facilities nationwide in coming years.

The property was purchased with an existing commercial mortgage-backed securities loan in place. “While many groups were turned off by the need to assume an existing in-place loan, we were able to find the right group for the deal who was willing to put in the extra time and effort to see it through despite the recent uncertainty surrounding COVID-19 and its strain on the healthcare community,” said IPA Senior Associate Chandler Pace.

Filley, Heilig, Pace and IPA Associate Christopher Dale represented seller 3700 Fettler Park LLC and procured the buyer.

IPA Capital Markets also arranged $22.3 million for 217 S. Barranca, an 85-unit multifamily asset in West Covina, Calif.

IPA Senior Managing Director of Capital Markets Michael Derk and Marcus & Millichap Capital Corp. Vice President of Capital Markets Nick Gray arranged financing.

Marcus & Millichap Senior Managing Director of Investments Tyler Leeson, First Vice President of Investments Matthew Kipp and IPA Senior Director Kevin Green represented the borrowers in the sale and purchase of both assets in the 1031 exchange.

The debt is fixed at 3.75 percent for seven years with three years of interest-only payments followed by a 30-year amortization schedule. The loan-to-value ratio equaled 60 percent.