UPDATED: JULY 13, 2018 9:51 AM — A newly constructed "Medical Village at Lake Nona" office building, which up until six months ago was controlled by local developer Tim Majors, fetched $11 million on Wednesday.
Miami-based PrimeMed Realty purchased the asset, its third medical office building in the Greater Orlando market, after a year-long contract and due diligence period.
"We're super excited about the property. We love Orlando," PrimeMed founder Chris Montello told GrowthSpotter. "Our goal is to own 10 buildings in Orlando within two years."
The two-story building on Moss Park Road was 90 percent leased at time of sale, according to listing agent Gail Bowden of MS&C Commercial – the commercial division of Michael Saunders & Company.
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Bowden specializes in landmark medical and industrial investment sales and negotiated on behalf of the seller, Australian Holdings, and said she brought Montello to the table.
"I've worked with him before," she said. "I sold him the Longwood property, as well."
The building has 27,500 square feet and 165 parking spaces on a narrow 4-acre tract. Montello said he was drawn to it because it could accommodate future expansion, either a single tenant or another multi-tenant space.
"It's already pre-approved for another 10,500 square feet," he said. "Now we're going to do our design for the second building. It will match the existing building, but we'll give it our own flavor."
Bowden said the Lake Nona market is so hot right now, she received about 10 calls a week regarding the Medical Village building while it was under contract. "That's very unusual."
Montello and partner Ofer Stark specialize in healthcare properties, which he called "defensive" investments that are stable because people always see doctors, even during economic downturns. The duo is still looking to expand their Orlando portfolio, targeting medical properties near hospitals.
"Our niche is properties between $5 million and $15 million," Montello said.
Majors Investments founder Tim Majors and business partner Jeff Cannon were the original owners and developers of the Lake Nona Medical Village through its construction in 2017, and the property is featured on Majors' website.
Majors and Cannon were officers in the Lake Nona property's owner-entity until January of this year, when they were replaced by Cannon's father, George. Bowden said Majors no longer had an ownership interest.
Dermatologist Christopher Manlio, a tenant in the Lake Nona building, is scheduled to be deposed on Aug. 10 by Majors' legal team. Manlio has alleged that Majors and Cannon forged a lease document that named him as a tenant in the Mount Dora building.
Montello said he was aware of the litigation, but the lengthy due-diligence period gave him ample time to inspect the property and close with confidence.
"We spent a lot of time learning about the tenant base in the building, and that's what made us very excited about the property," he said. "It's a great deal and a great market."
The Lake Nona project differed from the typical Medical Village business model because it was new construction. Most of Majors' Medical Village projects were distressed properties that he renovated into multi-tenant medical offices and sold after lease-up.
PrimeMed sourced a $10.25 million mortgage from Georgia's Own Credit Union, to mature in July 2023.