Stockdale Capital Partners completes sale of iconic medical office building in Downtown Los Angeles
LOS ANGELES – August 26, 2019 – Stockdale Capital Partners (“Stockdale”), a Los Angeles-based real estate investment manager, confirmed the sale of the 147,078 square foot 3rd Street Medical Center, located at 2100 West 3rd Street in the downtown Los Angeles area, for $85 million.
The property was originally purchased as a strategic, value-add opportunity in 2016 with only 68% occupancy. Over the past three years, Stockdale stabilized the occupancy and improved the credit healthcare tenant profile of the building. In addition to an established tenant roster featuring UCLA Health, Children’s Hospital Los Angeles and Providence Health, Stockdale was also able to recruit other high-profile tenants to the building, including AltaMed and U.S. Renal Care, bringing current occupancy above 90%.
“We saw strong intrinsic value in the location, where zoning restrictions and lack of medical office supply allowed us to reposition the asset without threat of competition,” said Stockdale Managing Director Dan Michaels. “The disposition of 3rd Street Medical Center allows us to realize material value after completing an extensive renovation program and driving enhanced cash flow through a well-executed leasing plan.”
The 3rd Street Medical Center was originally built in 1991 as the home to the internationally renowned House Ear Institute, founded by Dr. Howard House. The property was expanded in 2007 and now features modern, sweeping curvilinear construction with abundant glass and window lines, high ceilings with rare 14-15’ slab-to-slab floor heights, balconies, and sweeping views of the downtown Los Angeles skyline. The property is adjacent to the newly capitalized St. Vincent’s Medical Center, the oldest established hospital in Los Angeles.
Chris Bodnar, Lee Asher, Ryan Lindsley and Sabrina Solomiany from CBRE’s Healthcare Capital Markets Group partnered with Angie Weber and Dana Nialis with CBRE’s Southern California Healthcare Services team as Stockdale’s exclusive advisor.
“It’s very rare in a core market like downtown Los Angeles to be able to offer an iconic asset like 3rd Street Medical Center,” said Chris Bodnar, Vice Chairman, CBRE. “Given the lack of supply of core medical product – both locally and nationally – we received significant interest in the offering from a variety of capital sources, including healthcare REITs and institutional funds.”