Pensacola-based medical CRE investor pays $15M+ to enter Orlando market

Bob Moser
GrowthSpotter

An affiliate of Pensacola-based Catalyst Healthcare Real Estate paid nearly $16 million last Friday for a pair of medical office properties in Greater Orlando, placing the region firmly in its sights for more acquisitions.

Catalyst purchased the larger of the two, the Keith A. Ewing Medical Office Building in Avalon Park, for $12.545 million.

Located at 3701 Avalon Park West Blvd., the 1.2-acre property features the three-story building with 47,000 square feet of leasable area, built in 2009.

The sale closed on July 27, with the deed recorded Wednesday in Orange County. Catlayst paid $3.74 million the same day to buy Medical Village of Kissimmee at 1975 S. John Young Parkway.

The real estate investment and development group specializes in adaptive re-use of buildings for medical office tenants, built-to-suit developments and acquisition and leaseback.  

"What we really like of the Orlando market in general, and that submarket to the south in particular, is the tremendous amount of population and job growth, specifically planned urban development like Avalon Park," Alex Bell, Catalyst's senior vice president for acquisitions and new development, told GrowthSpotter

"The reason we think (that building's tenants) selected it is we see in the medical demographics a strong number of demand drivers in that area," he continued. "When we see strong demand drivers and favorable growth trends, we take a deeper dive in the market." 

Catalyst has owned other medical office properties in the Ocala and Gainesville areas, but this is its first in Greater Orlando. 

The seller for both properties was an affiliate of Milwaukee-based Physicians Realty Trust, which took a combined $3.1 million loss on the two transactions. The trust, also known as "DOCREIT," previously paid $14.6 million for the Avalon Park MOB and paid $4.92 million for the Kissimmee MOB.

"We have a good relationship with the seller, this was an off-market deal," Bell said. "There was no deferred maintenance, they took really good care of it." 

Catalyst typically manages its own MOB properties, but in this case has hired Avalon Park Group to serve as leasing agent and manager.

Looking forward, Catalyst is currently pursuing acquisitions and new development sites in Greater Orlando, Bell said. But it takes a partner-centric approach to its real estate search.

That means Catalyst will first analyze the healthcare demographics of a market to find a preferred patient population. Since most of their acquisitions are off market, said Bell, they'll then find the tenant they want to work with and lastly find the real estate to fit their needs.

The buyer sourced up to $9.34 million in a mortgage from Capital One Bank to help finance the Avalon Park acquisition and a $2.8 million loan for the Kissimmee Medical Village.

Reporter Laura Kinsler contributed to this report.

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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