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6/25/15
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Cypress West Partners has purchased two high-profile medical office buildings in Scottsdale, AZ in a joint venture with MedProperties Holdings LLC, a national, healthcare-focused real estate private equity firm headquartered in Dallas, TX. The price was not disclosed.
The buyers plan to refresh the properties’ exterior including updating common areas, landscaping and the overall look of the property. The two acquisitions include:
Scottsdale at Mescal, a 48.5k sf courtyard garden-style complex, built in 1985 and comprised of six buildings. The complex, located 10900 N. Scottsdale Rd, is anchored by Honor Health (formerly, Scottsdale Health).
Shea Corporate Medical Plaza, a two-story, 23.1k sf property, built in 1991, which houses a variety of medical and dental practices. Located at 7032-7054 East Cochise Rd, the facility features covered parking, courtyards and fountains.
Based on a 75.5 percent occupancy rate of the properties, the two firms recognized substantial upside in the acquisition.
“The properties are located within Scottsdale’s ‘Cure Corridor,’ which has a high concentration of businesses involved in the medical and life sciences sectors. The Cure Corridor has been a major driver for Scottsdale and the greater Phoenix economy. The sites also benefit from proximity to Honor Health Scottsdale Shea Medical Center.” said Chris Cumella, partner, Cypress West Partners. “Based on their superior location, we are confident that our team will be able to increase occupancy and positively impact property value.”
An even greater opportunity for both firms was to enter into a joint venture for the acquisition. MedProperties Holdings LLC had been seeking to expand both its existing investment presence, and also its joint venture partner relationships, in the Western United States. This transaction marks MedProperties and Cypress West’s first joint venture, with plans to do more.
The Scottsdale and greater Phoenix market has been a target for the firms due to its strong economy that currently boasts a 5.9 percent unemployment rate. Specifically, DTZ recently reported that several health care providers and insurers boosted their Arizona employment at double-digit rates.
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