Eight Northern Virginia medical offices sold in joint venture

Chicago-based Remedy Medical Properties and Kayne Anderson Real Estate announced on Wednesday that they have acquired eight Northern Virginia medical office buildings, spanning approximately 800,000 square feet.

The investment firms say the transaction, which was completed on June 17, significantly expands their market presence in the region.

Tax records indicate that a majority of the properties were previously owned by limited liability companies affiliated with Chicago-based asset management firm Harrison Street. Neither Remedy nor Harrison Street would disclose the transaction price. The sales have not yet been reflected in the Fairfax County or Alexandria real estate databases.

The properties acquired include

• 3023 Hamaker Court in Fairfax, a six-story, 119,788-square-foot, Class-A building that was built to suit in 2009 for Children’s National Health System. The building is anchored by Children’s National, a comprehensive pediatric care center. It is less than a mile from the 948-bed Inova Fairfax Hospital, and offers parking in an attached six-story parking structure. Harriston Street paid $62.5 million for the site in 2017, although tax records show the site was recently assessed at $37.7 million.
• 6354 Walker Lane in Fairfax County, a five-story, 131,574-square-foot medical office building, occupied by Inova and OrthoVirginia. The building is located in close proximity to Inova Health’s planned Franconia-Springfield Hospital, which is currently under construction with an expected completion date in 2028. Tax records indicated that the property was most recently owned by a limited liability company affiliated with Beacon Capital Partners. The property has an assessed value of $19.4 million.
• The Alexandria Professional Center, located at 4660 Kenmore Ave. in Alexandria, is a 12-story, 118,724-square-foot building that houses Advanced Dermatology & Cosmetic Surgery, as well as Inova’s cardiac diagnostic services. Harrison Street paid $38.6 million for the site in 2013, and it was recently assessed at $30.3 million.
• Prosperity Medical Center at 8501, 8503 and 8505 Arlington Blvd. in Fairfax. This three-building, 253,729-square-foot medical office park is located one mile from Inova Health’s 948-bed medical center. Tax records show Harrison Street purchased two of the buildings for $80.9 million and the third for $33.6 million in 2014. The three buildings have a combined assessed value of $49.1 million.
• Woodburn Medical Park, located at 3289-99 Woodburn Road in Annandale. This is a recently renovated two-building, 173,716-square-foot medical office building on the campus of Inova Fairfax Hospital. The park is anchored by Inova Health, which recently opened a 16,000-square-foot orthopedic surgery center in the 3289 building. Harrison Street purchased the properties for nearly $79 million in 2014. Today, they have a combined assessed value of $42.25 million.

Joe Magliochetti, chief investment officer for Remedy, stated in a press release that the acquisitions will strengthen Remedy’s position in the Northern Virginia and Washington, D.C. region. “The properties in this portfolio are ideally located in strong, growing markets with excellent demographics,” he said, “and all are purpose-built for clinical outpatient care.”

Newmark arranged the sale and financing of the portfolio. Remedy says it will handle leasing and management of the buildings through its regional office in Ashburn.

Headquartered in Chicago, Remedy Medical Properties is a full-service health care real estate company that owns over 33 million square feet of space across 44 states.

Kayne Anderson Real Estate is part of Los Angeles-headquartered Kayne Anderson, a $38 billion alternative investment management firm. The real estate arm is based in Boca Raton, Florida, and manages approximately $18 billion in assets, with a focus on medical office, senior housing, off-campus student housing, multifamily housing and self-storage.