Avison Young has closed the sale of Doctors Medical Park, a three-building outpatient clinical park, on behalf of Medical Center Associates, LLLP. The 90,076-square-foot property, comprising 10301 Georgia Avenue, 2101 Medical Park Drive, and 2121 Medical Park Center, was acquired for $15.25 million by an affiliate of Blue Arch Capital. 

The property is located in Silver Spring, MD, near Holy Cross Hospital, and features tenants like Community Radiology Associates and Fresenius. Medical Center Associates was represented by the Avison Young team of Jim Kornick, Mike Wilson, and Joe French. Avison Young also arranged the acquisition financing on Behalf of Blue Arch with a team led by Jon Goldstein, Michael Yavinsky and Wes Boatwright.  

“This sale demonstrates the strength of medical outpatient buildings despite challenges in other sectors,” said Kornick. “We received several competitive proposals for the financing, despite the challenging debt environment. Lenders were attracted to this opportunity due to the excellent location of the assets, strong sponsorship, and diverse tenant roster. A life insurance company provided the financing with exceptional terms,” added Goldstein. 

Broadstone Net Lease (BNL) said it decided to sell its clinically-oriented healthcare properties and had gone under contract for about half of them. The REIT said this would further its focus on core net lease assets in the industrial, retail and restaurant sectors.

“The assets identified for sale are not customarily included in single-tenant net lease portfolios and include clinical, surgical, and traditional MOB properties,” Victor, NY-based BNL said in announcing its fourth-quarter 2023 results.

Such assets “generally have shorter lease durations, greater landlord responsibilities, longer potential downtime upon lease maturity, and in some cases, greater potential challenges with tenants. The characteristics of these assets can make them attractive for a dedicated healthcare property investor and manager, but those same characteristics can make them challenging in the net lease space.”

In all, BNL intends to sell 75 healthcare properties, about 7% of its total portfolio. It has executed contracts on 37 of them, valued at a combined $253 million, with the remainder in varying stages of being sold.

BNL said that following the sales, the remaining assets in its healthcare portfolio will consist of “consumer-centric medical properties that are customary for many publicly-traded net lease REITs, examples of which include plasma, dialysis and veterinary services; assets with real estate fundamentals critical to the tenant’s business and little to no regulatory risk.”