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OrbVestthe investor specializing in medical office buildings in the United States, recently sealed the purchase of two quality buildings for its investor base, thus demonstrating its confidence in the future of the American economy.
Doctor’s office real estate in the fastest growing US states offers investors diversification in the world’s strongest economy, at a time when stock markets are boiling and central banks around the world are face the challenges of inflation while trying to balance the most appropriate monetary policies. answer.
In June, US Federal Reserve Chairman Jerome Powell told the Senate Banking Committee that he would use monetary tools (including interest rate hikes) to contain inflation, which peaked in May. its highest level since 1981. Powell said he was aware of the risk that too aggressive interest rate hikes could push the economy into recession, but said he believed the economy was well positioned at present.
“We are exceptionally cautious given the state of the US economy, but our thesis is that good quality medical practices with long-term net leases are unaffected by short-term market fluctuations. We are also sellers in this market, but when we find plenty, we will continue to acquire. said Justin Clarke, COO of OrbVest.
The first of two buildings, 40e Street Medical Office Plaza (Medical 38), located in the high-growth Phoenix metropolitan area, was acquired on 11e June and listed on the MERJ stock exchange on 30e June. The transaction closed at $10.6 million, including a provision for tenant installation and transaction costs.
While the building is currently 77.4% occupied by a mix of physicians, the vacant space offers an attractive value-added opportunity due to its location adjacent to the campus of Scottsdale Hospital, a 136-bed hospital. The intersection near 40e Street and Bell Road contain Paradise Valley Secondary School and various other shops and offices, making it a highly desirable location for potential medical tenants.
Arizona has the 15e-largest population in the United States, while the Greater Phoenix metropolitan area is ranked 5e in the country in terms of economic growth. This aligns with OrbVest’s strategy of focusing on the most populous and fastest growing states in the United States, where demand for medical services is expected to increase as residents age.
The second secure building now open to investment is 40e Street Medical Office Plaza (Medical 40) located in Albuquerque, New Mexico, which marks OrbVest’s first move to that state.
Albuquerque Medical Office is slightly larger than 40e Square of the street medical office. It is a Class A building currently 85% occupied by three net lease tenants (Quest Diagnostics, Sono Bello Plastic Surgery and WAFD Insurance Group). It has vacant space – again, providing an opportunity for value creation in a city with only 2.6% vacancy in the MOB sector.
The state of New Mexico is enjoying a growth and investment spurt, as thirty new projects, worth more than $2.2 billion, were completed recently, including by Netflix, Facebook and Intel. This region is a hub for renewable energy development and New Mexico is also the third largest oil producing state in the United States.
Albuquerque Medical Office is under contract for $11.6 million, including $2.07 million for installation and tenant transaction costs. The transaction should be finalized in the second week of August.
“We are always scouring the market for good quality medical properties to add to our portfolio and we really like this deal, and are particularly impressed with what is happening in the city of Albuquerque.” Clarke said.
“While the market remains competitive even in the vortex of this spike in interest rates, capital is still seeking those medical properties of inflation hedging, our growing network and reputation for closing deals is working for But we really have to put in some hard work to find those great deals.
BizNews founder Alec Hogg hosted a webinar with OrbVest‘s Martin Freeman and Justin Clarke, and they discussed the new real estate investment opportunity in Albuquerque that OrbVest offers any investor looking to invest from just $1,000. Click here to view a recording of the webinar.
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