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Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
Chicago-Oak Brook
O (630) 570-2246
M (630) 344-9355
Randolph Taylor
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Property Details


For Sale
$915,000

66420 W 127th
Palos Heights IL 60463

Property Type Medical Office
SF 9500
Built 1968
Floors 2
Acres .90
Zoning B
Parking 55
Signage Monument/Directory
Occupancy 78%
Price $915000


Description


Well maintained two-story Medical Office Building in South Suburban Palos Heights on busy 127th St. All Brick and Flexicore construction.


Highlights


  • Brick Flexicore Construction
  • Newer Mechanicals
  • Very Well Maintained
  • Good Visibility along busy 127th St

[pw_map address=”6420 W 127th St Palos Heights IL 60463″]

Contact

CRE National Price Indices Maintain Upward Trend

Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
Chicago-Oak Brook
O (630) 570-2246
M (630) 344-9355
Randolph Taylor
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Health-Care Real Estate Expected to Remain Strong Despite Uncertainty Over Drive to Repeal Obamacare
Health-Care Real Estate Expected to Remain Strong Despite Uncertainty Over Drive to Repeal Obamacare

Despite Uncertainty Over Drive to Repeal Obamacare, Investors Banking on Demographics to Maintain Healthy Outlook for Health-Care Properties

Health-Care Real Estate Expected to Remain Strong, Though Medical Providers Expected to Delay New Commitments While Assessing Impacts of ACA Repeal, New Health Care Initiatives

Health-care REIT stocks definitely caught a cold in the wake of the unexpected November election results. Even as the Dow Jones Industrial Average topped 20,000 for the first time, the health care REIT sector has declined 2.7% over the past three months, with shares of leading companies like HCP, Inc.  tumbling over 10% in the run up and weeks following the election.

To be sure, many market analysts acknowledge health-care markets face many unknowns, chiefly regarding any replacement for the Affordable Care Act (ACA) targeted for repeal by Republicans, and the effects of changes in government reimbursement of medical and seniors housing costs to providers.

According to a new report by the Congressional Budget Office, repealing portions of the ACA, also known as Obamacare, would cause 18 million people to lose their insurance during the first year of a new plan, and lead to 32 million more people becoming uninsured by 2026. Repeal would also lead to a doubling in the prices of premiums paid by those who remain covered in the individual insurance market, according to the CBO.

Not surprisingly, many health-care providers are expected to delay making major commitments until more information about impending changes to the Act becomes available, according to CBRE Group, Inc.’s 2017 Medical Office Building sector outlook.

While any repeal of the ACA without a replacement plan in place could bring a steep drop in health-care visits and demand, CBRE Americas Head of Research Spencer G. Levy, chief economist Jeffrey Havsy and senior managing economist Timothy Savage recently authored a report saying the long-term prospects of heath-care real estate will be affected more by the tens of millions of retiring baby boomers and ongoing health-care industry consolidation and technological advances, than by the vagaries of government health care policy.

“We are certainly in the midst of intense change and corresponding uncertainty in the health care world, particularly when it comes to government reform,” added Matthew Stevens, senior director with The Advisory Board, in a recent conversation with Colliers International Healthcare Services National Director Mary Beth Kuzmanovich. “The true keys to success are less dependent on political particularities. Providing accessible, reliable and affordable health care will remain top priorities,” Stevens said.

CBRE’s analysts also said a full repeal is highly improbable due to the negative impact of millions of Americans immediately losing their insurance and the potential for higher federal deficit spending if the tax revenue underpinning the law is not replaced. But they believe any short-term disruption will be trumped by major population trends.

“Over the long term, the wave of aging baby boomers will drive demand for health care services, irrespective of any regulatory changes,” the report said.
As of the third quarter of 2016, medical-office buildings (MOBs) continued to outperform the broader U.S. office market, achieving over 50% higher demand growth, according to CoStar Portfolio Strategy. The average U.S. medical office vacancy rate of roughly 8% is well about the overall office vacancy rate in all but a few high-construction metros such as San Francisco and Nashville, according to CoStar data.

Health-Care Real Estate Expected to Remain Strong Despite Uncertainty Over Drive to Repeal Obamacare

Along with other income-property types, MOB sales and pricing have slowed in comparison to 2015’s historic peaks. However, MOBs, along with seniors housing, skilled-nursing facilities (SNFs) and hospital properties, continue to attract debt and equity capital, said James Seymour, senior managing director of Capital One Healthcare’s real estate financing team, which closed more than 220 transactions, half of them leveraged loans.

One of those deals was among the largest medical office transactions of the year, In December, the Capital One team served as the lead arranger and book runner for a $535 million loan to mortgage REIT Starwood Property Trust for its acquisition of 34 medical office properties.

CBRE’s U.S. Healthcare Capital Markets Group sold 109 medical facilities in 2016 totaling over 7.2 million square feet, including another of the year’s largest portfolio transactions, the $725 million purchase of 52 medical offices by Physicians Realty Trust, a self-managed health care REIT, from Englewood, CO-based based Catholic Health Initiatives (CHI).

“The market for medical office buildings was particularly robust last year. We saw strong deal flow, driven in part by hospital monetization and consolidation,” Seymour said. “Private buyers took a more active role, as private REITs moved to the sidelines and some public REITs were net sellers of assets for the first time in many years.”

As for health-care REITs, Peter Martin, a health care REIT analyst for JMP Securities, expects year-over-year declines in investment activity during 2017, and flat or slightly depressed capital deployments in 2018. The sector outlook is tempered by a “lack of clarity” regarding health care reimbursement changes under the Trump Administration, Martin said in a preview this week of fourth-quarter 2016 health-care REIT earnings.

Trump Policies Brings Opportunities for Seniors Housing, Challenges for Skilled Nursing

Some skilled nursing and seniors housing operators reported choppy operating performance as regulatory and market changes settle across the post-acute space, Seymour said.

While the long-term outlook for seniors housing remains very strong, operators continue to monitor flattening short-term growth in many metros as the market tries to absorb newly developed assisted-living and memory care properties, and other regulatory and cost pressures.

However, seniors housing stands to be the biggest beneficiary among health-care property sectors from Trump Administration’s policies promoting tax cuts and economic growth, which could lead to deeper demand and stronger investor appetite for seniors housing and more M&A activity this year, JMP’s Martin said.

Preliminary data from Irving Levin Associate indicates the dollar value of publicly announced seniors care M&A transactions was $14.4 billion in 2016, just edging out 2015’s $14.2 billion, though the number of deals declined by 6% to 337 in 2016.

The coming months will be a period of ‘price discovery’ in the skilled-nursing facility and long-term care hospital sectors as fundamentals weaken amid reimbursement concerns and rental rate pressure on SNFs and long-term care hospitals, Martin said. Declining cap rates will also suppress deal volume for quality MOB and senior housing assets, he added.

 

Source: CoStar Randyl Drummer January 24, 2017

Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
Chicago-Oak Brook
O (630) 570-2246
M (630) 344-9355
Randolph Taylor
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medical-office-property-sales-stay-healthy-as-investment-demand-outpaces-new-supply
REITs, Investment Funds and Others Compete to Buy Limited Supply of Modern MOB Assets

Medical Office Property Sales Stay Healthy as Investment Demand Outpaces New Supply

This week’s off-market purchase by Healthcare Realty Trust of a 103,500-square-foot medical office building on the campus of Inova Loudoun Hospital in Leesburg, VA, is the latest example of the fever-pitch competition among buyers for a limited supply of institutional-grade MOB properties available for sale.

“This is as core as core gets, and this kind of high-quality medical office asset seldom trade in the Washington, D.C. market because most of the dominant health systems in the region such Johns Hopkins own all the assets that they occupy,” noted Avison Young principal Jim Kornick, who led the team representing a joint-venture between developer Foulger-Pratt and a global real estate investment management firm, which sold the asset for an undisclosed price. “There are just not a lot of trades.”

While overall medical office building prices peaked a year ago, pricing has only become more competitive for core MOB assets as investors of every type have retreated from secondary and tertiary markets back to reliable core assets in primary markets, Kornick said.

With strong demand and positive sentiment attracting new types of investors and adding to the competition among buyers, MOB deal velocity accelerated 17% in the trailing 12-month period ending June 30, according to Marcus & Millichap. Average pricing per square foot of medical office space has also advanced 17% to $230 PSF since the end of 2014, according to Marcus & Millichap’s analysis using CoStar data.

“We had tremendous 20% growth from 2014 to 2015, and clearly, it’s continuing on into 2016, albeit maybe not at the same high levels,” said Marcus & Millichap’s John Smelter, a veteran of three decades in the healthcare real estate. “The demand is absolutely there.”

Smelter noted that the MOB vacancy rate dropped 80 basis points to 8.6% in the second quarter from a year ago, the lowest level in eight years.

Despite recent news and accompanying noise on the presidential campaign trail about potential premium increases, next year for Affordable Care Act plans, analysts cite rising patient counts from expanded health coverage under Obamacare, combined with the demographically aging U.S. population, as major demand drivers for the medical office building sector.

Also, as hospitals and health-care systems continue to buy-out private practices and move outpatient services off of main hospital campuses, major health-care providers now control a large share of MOB leasing activity, resulting in heightened demand for newer modern buildings with flexible floor plans. This has resulted in a rise in both new projects and deliveries of new space in 2016, M&M said.

In particular, institutional-grade property deals have seen a substantial uptick in transaction velocity in recent quarters. Sales of such properties have only been limited by a lack of available properties on the market, M&M added.

Off-campus properties with strong tenants with long-term leases are selling for a premium. Other types of off-campus MOBs, including those located in secondary or tertiary markets or properties in need of repositioning, can trade with first-year yields up to 200 basis points higher.

The firm said it is also seeing an increase in so-called crossover capital, in which a number of single-tenant retail investors have acquired single-tenant MOB properties.

But the single biggest factor behind the booming MOB investment market Marcus & Millichap reports is that several REITs and major investment funds that typically focus on senior housing are currently diversifying their portfolios and reallocating large sums for acquiring medical office buildings and even hospital properties.

REITs have announced at least six deals to buy more than two dozen hospitals in the first three-quarters of 2016. In the largest such deal, Medical Properties Trust, Inc. (NYSE: MPW) last month agreed to acquire the real estate interests of nine acute-care hospitals across Massachusetts operated by Steward Health Care System LLC for $1.25 billion.

Other MOB investors who previously targeted stabilized assets in core markets are eschewing the lower-risk but higher priced options and scooping up value-add properties or even participating in the development and equity placement, Marcus & Millichap said.

One of the newer investors in MOBs is Bethesda, MD-based Global Medical REIT Inc. (NYSE: GMRE), which this week closed on the purchase of nine medical office buildings in three separate portfolio transactions in South Dakota, northern Ohio and East Orange, NJ, with three more buildings scheduled to close in December, for an aggregate $30.9 million.

Source: CoStar Randyl Drummer October 12, 2016

Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
Chicago-Oak Brook
O (630) 570-2246
M (630) 344-9355
Randolph Taylor
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New Listing Surgical Center Urgent Care Facility
For Sale Roosevelt Rd Glen Ellyn IL

Surgical Center and Urgent Care Facility For Sale. Ideally located on busy Roosevelt Rd in Glen Ellyn just East of I-355. Offers a bright airy waiting room, reception desk, back office, two surgical rooms, large recovery room, three exam rooms with sinks, six total restrooms, lead-lined x-ray room, lab rooms, sterilization area, break room and file storage. Owner occupied and currently operating facility. Please do not disturb. Showings available by appointment only Thursday and Fridays.


Highlights

  • Surgical Center and Urgent Care Facility
  • Fully Built-out & Currently Operating
  • Ideal Roosevelt Rd Location just East of I-355

 

Specifications

Address: 1186 W Roosevelt Rd Glen Ellyn, IL
Price: $1,200,000
Building Size: 3,680 SF
Price/SF: $326.09
Property Type: Office
Property Sub-type: Medical Office
Additional Sub-types: Acute Care Hospital
Property Use Type: Vacant/Owner-User
No. Stories: 1
Building Class: B
Year Built: 1983
Lot Size: 1.39 AC
Parking Ratio: 8.70 / 1,000 SF


Photos

Randolph Taylor

Multifamily Investment Sales Broker at Marcus & Millichap
Chicago-Oak Brook
O (630) 570-2246
M (630) 344-9355
Randolph Taylor
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medspring-naper-ext-2

Medical Office Development Ramping Up Ahead of Changes Under Affordable Care Act

Expected Changes Under Obamacare Altering Space Requirements of Health Care Providers, Both On and Off the Hospital Campus

Developers are finally ready to move forward on numerous medical office building (MOB) development projects as the new era of retail medicine begins under the new Affordable Care Act, despite early problems that have temporarily put the Obamacare registration web site out of commission.

Heightened demand for modern and more efficient outpatient medical office space is generating an uptick in both ground-up development and renovation of existing buildings. In some cases, health care providers are even repurposing vacant retail space in malls and shopping centers, according to Newmark Grubb Knight Frank’s most recent Healthcare Real Estate Outlook.

Medical office brokers have reported a recent increase in RFPs for health-care real estate projects as vacancies in higher quality 4 and 5 Star medical office space has fallen from about 11.5% in late 2009 to 10.5% as of third-quarter 2013, according to CoStar data, and more than 8.23 million square feet of new medical office space is under construction.

“We’ll see an increase in in the pace of MOB and clinic development all the way through 2014,” said Garth Hogan, executive managing director of global healthcare services for NGKF. “Where the health systems can find land, they’ll build and where they can’t, they’re repurposing retail, a new trend we’re seeing this past year.”

For example, MemorialCare Medical Group opened a new primary care, specialty care and urgent care center in a converted Borders bookstore earlier this year in the Los Altos MarketCenter in Long Beach, CA. The two-story, 30,000-square-foot clinic will serve as a “one-stop-shop” for Los Altos area families, MemorialCare said.

In another case of retail recycling, Kaiser Permanente in January will open a 32,000-square-foot medical office building in East Portland, OR, at the site of a store formerly occupied by the now-defunct Circuit City electronics chain.

Regional retail centers are typically well located, have excellent name recognition, good access and ample parking. The open layout and 20,000- to 40,000-square-foot of such empty retail spaces is compatible with clinical space, Hogan said.

“It’s a perfect fit as the health systems become more competitive and try to place these clinics in the community,” he said.

Among the new development projects poised to begin is the 236-acre March Lifecare Campus in Riverside, CA, slated for 3.5 million square feet, which ranks it as one of the largest health-care developments in the country.

“Contractors, architects and providers are all hovering over the [March Lifecare] project right now. Health systems across the country are signing big leases, and construction will start on those projects over the next year,” said Hogan, who is marketing the project.

March Lifecare exemplifies a new trend in health care development expected to pick up momentum under the ACA, which provides incentives for providers to centralize patient continuum of care in one location.

The facility will eventually include a hospital, medical office space, retail, restaurants, senior care, skilled nursing, short and long term acute care, hospice, ambulatory surgery and even a hotel, all in single master-planned campus. Increasingly, developers are incorporating retail, lodging and senior residential uses into these large health-care developments.

Hogan said three different health systems are now in negotiations to build the hospital, and several skilled nursing operators are also vying for space in the March project, which appeared to be treading water as recently as last year.

 

Medical Industry To Benefit from Continued Growth

“There’s a lot of pent-up development activity for ambulatory facilities by third-party developers on behalf of hospitals, including clinic space, medical office and ambulatory surgery centers,” said Jeff Cooper, executive managing director at Savills.

Based on extensive conversations with national health care developers, Cooper estimates the level of development activity has increased 50% in the first three quarters of 2013 over the same period in 2012.

“Last year, developers were complaining about a lack of RFPs for new facilities. This year, the only complaining is about the need to prepare responses to all the RFPs that have come out,” said Cooper.

The boost in development proposals reflects both improving economic conditions where hospitals feel more comfortable spending on capital improvements; and because hospitals need to pursue an ambulatory care strategy, or risk losing patients to competing institutions, Cooper added.

“We have much more clarity now, and everyone realizes 2014 is coming up fast,” Cooper said.

Under the ACA’s new reimbursement models, Medicare accountable care organizations (ACOs), which are network of hospitals and providers that contract with Medicare and Medicaid to provide care to large blocks of patients, will pool services under a single-service provider. Those services must be centralized in an ambulatory care rather than an in-patient hospital setting.

“Very often, hospitals are in urban locations where parking is difficult and patients may have to travel far, so providers are looking to move a lot of their ambulatory clinic space, such as urgent care clinics and surgical care centers, away from the hospital campus into a hub and spoke format,” Cooper said.

Source: CoStar Randyl Drummer November 6, 2013