Clarion Partners, LLC recently executed on more than a dozen highly curated single-asset healthcare investments totaling over $1 billion. Terms were not disclosed. The transactions expand New York City-based Clarion’s national healthcare footprint and deepen its relationships with established operators in key growth markets, along with underscoring its continued conviction in the healthcare real estate sector.

“We are pleased to have completed these acquisitions, reflecting our disciplined investment approach and deep sector expertise,” said Clarion president Josh Pristaw. “Healthcare real estate continues to present compelling opportunities, particularly in senior housing and post-acute care, where demographic trends and evolving patient needs are driving long-term demand.”

With the recent acquisitions, Clarion now owns 2,000 seniors housing units acquired through core, core-plus and value-add strategies; 133,000 square feet of newly delivered or recently renovated medical real estate; and a growing pipeline of ground-up seniors housing developments.

Argyle’s Heritage planned development may claim Baylor Scott & White and H-E-B as interested parties. The two entities are looking to build on the Heritage tract development along Robson Ranch Road and I-35W.

Community Impact reports Baylor Scott & White wants to develop on 50 acres of the 195-acre property, which will include several different buildings including retail, fitness and medical spaces. They have plans of potentially constructing a specialty heart hospital, which may include a surgical center and acute care hospital later in the construction timeline. H-E-B is looking at purchasing a tract of land on Heritage for a grocery store.

Baylor Scott & White has a five-phase plan lasting 24 years with the provisional plan of constructing a wellness campus.

The overall development of this land is expected to consist of five phases over a 30-year period, with Phase 1 lasting from 2024-28 and including the construction of the grocery store and retail along I-35.

Vice President Christian Vaughan of Northmarq’s National Healthcare Group recently brokered the $13.5 million sale leaseback of two outpatient primary care properties in Noblesville, Indiana. The seller was Riverview Hospital, and the buyer was Four Corners Property Trust.

The portfolio totals 32,744 square feet and includes Riverview Health’s Noble Creek (205 Noble Creek Drive) and Westfield (865 Westfield Road) locations. The tenant operates on long-term, triple net leases, and the transaction was priced at a 7.3% cap rate.

“This was a great seller and buyer match to transact on two essential outpatient facilities, via a long-term sale-leaseback agreement,” said Vaughan. “Strategically located near the hospital, the sites are essential to the tenant, delivering critical care to the local community in which demand for services is rapidly growing. The long-term favorable outlook and critical nature of these medical outpatient buildings present a strong investment for the buyer.”

When the word “medical services ” is mentioned, hospitals, ambulatory surgery centers, outpatient clinics and medical office buildings might come to mind.

The increased need for healthcare has led to greater space demands in this sector in recent years. According to a Cushman & Wakefield article, “an aging baby boomer cohort and the impact of a global pandemic is driving the rising demand for a wide range of medical services.”

Enter the concept of “medtail.”

Explaining Medtail

The article defined medtail as, “Healthcare services located in a retail setting.” These retail settings include strip malls, shopping centers and what Cushman & Wakefield called “shop-in-shop concepts” (such as clinics taking space in retail pharmacy centers). Tenants have included vision and dental offices, but specialty wellness services are now also growing in popularity,” the article said. Additional medtail users include:

• Occupational/physical therapy

• Holistic/alternative centers

• Veterinary and pet services

• Wellness/recovery services

Growing medtail sectors include alternative medicine, including acupuncture, homeopathy and naturopathy. The article indicated that these services include chiropractic, massage and herbal medicine.

What Landlords Should Know

On the plus side, a healthcare services tenant can help “provide creative ways for landlords to fill vacancies and generate foot traffic,” the article said. Medtail tenants are less impacted by economic cycles and can be recession-proof. Additionally, such tenants can boost foot traffic and create a new source of demand.

But retail owners need to do more than post “space available for medtail tenants.” These healthcare providers have different needs from the usual retail tenants. The article indicated that landlords should be aware of the following when considering moving into medtail leases:

• Load factors and weight constraints

The owners and landlords willing to consider medtail tenants could experience multiple advantages, including fewer vacancies and unique tenant mixes.

Meridian has purchased a vacant 94,569-square-foot medical building in Tucson located at 4888 N. Stone Avenue on a 9.27-acre parcel. The property will be fully occupied by El Rio Health, an affordable healthcare provider in Tucson for 54 years.

Meridian plans to invest significant capital into renovations and upgrades immediately. The former Tucson Heart Hospital, which has been vacant for 15 years, will be converted into a state-of-the-art health center. In addition, the project plans to install Class A custom tenant improvements fully designed to meet El Rio Health’s service line needs. Construction is estimated to begin later this month, with completion anticipated in early 2026.

Rick Kleiner of Cushman & Wakefield | PICOR represented Meridian on the acquisition and El Rio Health on the lease. Vince Femiano and Kate Morris of Transwestern represented the seller, an affiliate of Tenet Health, in the sale.

Healthcare Realty Trust sold two Durham area medical office buildings for a combined $20 million. AW Property acquired both properties: the Duke Health Center for $15.2 million and the UNC Family Medicine Center for $5 million.

Healthcare Realty Trust acquired both buildings in 2021, one for $16 million and the other for $5 million.

The Duke Health Center is fully leased. Tenants include Duke Children’s Primary Care and Duke Department of Neurology. The Class-B medical facility, which was built in 1999 and renovated in 2015, has 41,036 square feet of space across two stories.

The other building AW Property Co. bought was the UNC Family Medicine Center at 5704 Fayetteville Road. The UNC Family Medicine Center provides services for newborns to aging adults. The single-story Class-B building, built in 2005, has 11,924 square feet of medical office space and is fully leased.

Brea-based Healthcare Property Advisors has launched HPA Exchange LLC, a real estate investment sponsor that will provide accredited investors with private placement opportunities anchored by medical properties. The platform will initially focus on Section 1031 exchange offerings.

HPA Exchange will target healthcare real estate within secondary growth markets that exhibit strong operating fundamentals, stable health system environments and a growing aging population. Its management team averages 25 years’ experience in healthcare real estate, including co-presidents Thùy Turner and Robert Lee.

“The healthcare industry has historically been recession resilient with predictable occupancy rates, paving the way for the potential of long-term reliable cash flows and strategic value-add opportunities,” said Turner. “Non-high-acuity healthcare is also transitioning from large acute care environments like hospitals to well-located and well-designed strategic ambulatory care, typically closer to neighborhoods.”

Atkins Companies has initiated a multi-million dollar capital improvement venture at the Washington Medical Arts building in Washington Township, NJ. Acquired in 2023, the two-story, 70,140-square-foot Class-A medical office structure will undergo enhancements including repurposing a former fitness center into 33,000 square feet of clinical medical space and creating 7,700 square feet of leasable space.  

“When we purchased the Washington Medical Arts building last year, we recognized its potential to become one of southern New Jersey’s premier healthcare destinations,” said Cory Atkins, principal of Atkins Companies. 

Lease signings and expansions with Rowan University School of Osteopathic Medicine, Weisman Children’s, and Jefferson Health further enhance the building’s services. Upon completion in June 2024, the Washington Medical Arts building will offer over 33,000 square feet of new medical space for lease. 

Marcus & Millichap has completed the sale of a net-leased Xpress Wellness Urgent Care portfolio located in Elk City, and Enid, Oklahoma. The Elk City location at 411 W. 3rd Street sold for $2.56 million, and the Enid location at 220 S. Van Buren Street sold for $2.11 million.

Dominic Sulo, Senior Managing Director, and Benjamin Bach, Associate, investment specialists in Marcus & Millichap’s Chicago Oak Brook office, had the exclusive listing to market the property on behalf of the seller, a limited liability company.

Sulo and Bach secured and represented the buyer, a limited liability company. Regional Manager and Broker of Record Steve Greer assisted in closing this transaction. The Xpress Wellness Urgent Care clinics are free-standing facilities offering walk-in treatment, lab testing, and diagnostic imaging.

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.”