MedProperties Holdings and Cypress West have acquired the Bakersfield, California-based Riverwalk Medical Plaza. No financial terms were disclosed. The property is 94 percent leased with tenants that include Dignity Health, Quest Diagnostics, Children’s Hospital of Los Angeles and GEM Physicians Medical Group. Capital One arranged debt financing for the acquisition.
BAKERSFIELD, Calif., and DALLAS, June 7, 2017 – The newest joint venture acquisition from MedProperties Holdings LLC has it all: immediate cash flow; a value-add space with additional leasing opportunities that will provide incremental income; a premium, in-demand market and superior location; and high-quality, hospital-affiliated tenants.
MedProperties and joint venture partner Cypress West Realty Partners LLC recently acquired the 54,923 square foot, Class A Riverwalk Medical Plaza at 9450-9500 Stockdale Highway in the growing, thriving Bakersfield market. The project is 94 percent leased.
MedProperties is a national healthcare-focused real estate private equity firm headquartered in Dallas. Cypress West is a Rancho Santa Margarita, Calif.-based firm that acquires, develops and manages healthcare properties. This is MedProperties’ fifth transaction with Cypress West and the 15th investment by MedProperties Investment Partners Fund.
Darryl Freling, MedProperties Managing Principal, noted that the acquisition fits well with the discretionary fund’s goals.
“This acquisition will provide MedProperties Investment Partners Fund with not only immediate cash flow,” he says, “but also additional leasing opportunities and financial benefits over the long-term through the vacant 5,500 square foot lower mezzanine, which wasn’t included in the property’s initial square footage.”
Mr. Freling says the acquisition also makes great strategic sense for the partners because of the building’s excellent location.
“Riverwalk Medical Plaza is in the premium Bakersfield market where assets such as this are in high demand,” he says. “It’s also in a highly visible location with access to the new West Side Parkway and it’s right across from the most prominent hospital in Bakersfield, Dignity Health Mercy Hospital Southwest.”
He noted that the property is within 250 yards of the hospital, which allows for it to comply with the site neutrality payment rule. Compliance with this rule provides for certain hospital-affiliated services to be billed at the same Medicare rates as the adjacent hospital, thus making the property a strategic location for the hospital.
MedProperties Managing Principal Roman J. Kupchynsky II said the acquisition is a continuation of the firm’s long, fruitful partnership with Cypress.
“We’ve partnered with Cypress on four previous acquisitions, which were very successful,” he says. “Cypress is a qualified operator and manager of healthcare real estate and has proven that it has the market knowledge and expertise required to execute on the value-add strategy.”
Mr. Kupchynsky noted that another plus is that the two-story Riverwalk Medical Plaza is 94 percent occupied with solid anchor tenants, some of them hospital-affiliated. Tenants include Dignity Health, Quest Diagnostics, Children’s Hospital of Los Angeles and GEM Physicians Medical Group.
Capital One Healthcare Financial Solutions arranged debt financing for the Riverwalk acquisition, as well as the joint venture’s previous four acquisitions.
MedProperties Holdings LLC is a Dallas-based healthcare real estate private equity firm with offices in Greenville, South Carolina that provides qualified developers and owner/operators with a consistent source of equity investment for the development of new, or value-added acquisitions of existing, healthcare-related real estate projects, including both multitenant medical office buildings and single-tenant, specialty facilities, as well as selected senior housing communities. MedProperties invests through its discretionary funds: MedProperties Capital Partners LP, MedProperties Investment Partners LP and MedProperties Senior Housing Fund I LP, and is dedicated solely to healthcare real estate. For further information on MedProperties, please visit www.medpropertieslp.com.
About Cypress West Partners
Cypress West Partners LLC was formed through strategic affiliations with institutional investors, high-net worth individuals and family offices with the purpose to acquire, develop and manage healthcare properties across the Western United States. At Cypress West, the team is focused on understanding and implementing on all aspects of what makes a high-performing asset. Cypress West is highly experienced at working across the healthcare spectrum, from institutional owners to hospitals and individual doctors. The strength and legacy of its business model is in Cypress West’s method for successfully acquiring the right medical real estate assets backed by solid data analytics, followed by a strategic leasing and management plan to increase value at the property and investment levels. To learn more about Cypress West Partners, please visit cypresswestpartners.com.