Northmarq’s Senior Vice President Brad Pepin and Associate Mark Grossman, have completed the sale of a 192,800 sq. ft. industrial property leased to FedEx Ground in Bozeman, Montana. Pepin and Grossman represented the seller who developed the property for FedEx. The buyer was a 1031 exchange buyer based in California.We’re very pleased with the outcome of this transaction, on behalf of our seller,” said Pepin. “Given the credit of the tenant, long lease and high-quality construction, the property was successfully marketed and sold to a qualified tax-motivated buyer, even in the midst of a tumultuous and softening market.”The property was built in 2023 and is situated on approximately 21 acres. The brand-new facility features tilt-wall concrete construction, a TPO roof and ample space for parking, outdoor storage and future expansion.

Brian Corriston, vice president in Northmarq’s Houston office, has completed the sale of a single-tenant 17,410 sq. ft. government office property located at 2027 North Stallings Dr. in Nacogdoches, Texas. The property is 100 percent occupied by two tenants, the Texas Department of Family and Protective Services (DFPS) and the Texas Health and Human Services Commission (HHSC). Corriston represented the seller, a local developer. The buyer was pooled individuals based in Texas.“In a challenging market with a challenging assignment, our team was able to secure an experienced owner of government leased investment property”, said Corriston. “Our buyer realized the future upside with below market rents and below market price per square foot for the building. I appreciate the confidence the seller has in Northmarq to deliver. Congrats to both seller and buyer.”The property consists of two one-story buildings situated on 2.29 acres. Built in 1997, one of the buildings recently underwent extensive interior remodels, including new flooring and countertops and fresh paint. The single-tenant office facilities are located along North Stallings Dr., home to several other government offices, and directly adjacent to Etech, a technical support and software firm. The property is just west of a dense retail corridor featuring a Walmart and Lowe’s Home Improvement and less than 3.5 miles from Stephen F. Austin University.DFPS works with communities to protect children, the elderly and people with disabilities from abuse, neglect and exploitation. The HHSC is an agency within the Texas Health and Human Service System and manages programs that help families with food, health care, safety and disaster services. Both tenants are backed by the State Government of Texas, which carries an investment-grade credit rating.

Northmarq’s Northwest Investment Sales team of Managing Director Sean Tufts, Managing Director Kevin Adatto and Associate Joe Dugoni, arranged the sale of a former Nordstrom property located at 11900 SE 82nd Ave. in Happy Valley, Oregon. Northmarq seamlessly represented both the seller and the buyer in the deal, further underscoring the firm’s commitment to facilitating mutually advantageous transactions.“We are delighted to have played a pivotal role in this transaction,” commented Tufts. “This transaction showcases the importance of the ability to navigate off-market deals in turbulent times.”Situated at the north end of the prominent Clackamas Town Center, the former Nordstrom property spans an impressive 120,000 sq. ft. and is an integral part of the renowned mall. The property’s prime location positions it as a hub of untapped potential, offering a unique redevelopment opportunity in one of Portland’s most sought-after areas. Led by two former partners at CPX, who moved to Northmarq’s platform in early August, Tufts and Adatto continue to establish a track record of identifying and seizing opportunities and helping quickly establish Northmarq as an industry frontrunner in the Northwest.“It takes specialized partnerships to make deals work in today’s market, and I’m pleased we were chosen to take the next steps with this iconic asset,” said Sanjiv Chopra, CEO of Rhino Investments.Rhino Investments Group is a privately held, diversified real estate acquisition and development firm known for its expertise in repositioning and redeveloping underutilized, distressed, or environmentally challenged properties. The company has acquired and developed over 5 million square feet of property in the United States.

Senior Vice President Brad Pepin and Senior Associate Jonathan Thompson in Northmarq’s Tulsa commercial investment sales office arranged the sale of a 387,303 sq. ft. distribution facility in Lumberton, North Carolina. The single-tenant industrial asset is 100% leased to Elkay Plumbing Products Company with a guaranty from parent company Zurn Elkay Water Solutions. Northmarq represented the seller, an Atlanta-based developer. The buyer was an individual investor based in California.“As we marketed this newly constructed Class A build-to-suit for our seller, we were thrilled by the market response overall,” said Pepin. “This net leased asset boasts of its quality construction, lease, tenant and location – all contributing to finding the right private investor who met our seller’s objectives.”“The fulfillment of this transaction is another example of how industrial deals are made today. We had a wonderful property, a strong tenant, and market dynamics that allowed our seller to connect with and ultimately transact with a qualified buyer,” added Thompson. “The North Carolina industrial market remains active, with significant activity on both the leasing and investment sides.”Situated on approximately 49.7 acres, the distribution facility is strategically located at the intersection of Interstate 95 and 74 with ample room for expansion. The new build-to-suit facility is Elkay’s second location in Lumberton and roughly three times larger than their current facility. The Lumberton facility is one of Elkay’s mission-critical locations and will allow the company to optimize distribution through its growing business lines. The tenant operates on a corporate guaranteed long-term double net lease. 

Jack Collins, senior associate in Northmarq’s Chicago office, completed the sale of a brand new, single-tenant property leased to Dollar General located at 1310 Westinghouse Rd. in Georgetown, TX. Collins successfully closed the property at a 5.25% cap rate to a private investor.“Even with turbulent market conditions, properties in Sun Belt markets, like Austin, TX are continuing to have a lot of activity and achieve strong pricing when compared to other regions,” said Collins.The newly constructed freestanding Dollar General features 10,566 sq. ft. situated on approximately 1.32 acres. The property is located just off Interstate 35 along the busy Westinghouse Rd. Georgetown, TX is a suburb less than 30 minutes north of Austin, TX, and has been ranked as one of the fastest growing cities in the U.S. The tenant operates on a long-term absolute triple net lease and has proven to have one of the most successful business models in the net lease space.

Quarterly summary of future growth plans for the top 100 retailers, as selected by brand recognition, expansion rate and frequency of investment sale transactions Average cap rate and sale price information for the most commonly traded retailers Credit rating summary with parent company information Average square footage ranges and store counts for each tenant  

Northmarq’s investment sales team has announced the addition of Michael Zimmerman as Vice President – Commercial Investment Sales. Zimmerman specializes in the disposition and acquisition of single tenant and triple net lease retail properties, further expanding Northmarq’s commercial investment sales. With over 20 years in the commercial real estate business, Zimmerman has been involved in over $1 billion of sales for shopping centers, single tenant, strip centers, office buildings and land deals. Prior to Northmarq, Zimmerman served as principal owner at Ground & Space. He has also served as a partner at Atlantic Retail Properties and a managing director at Calkain Companies. “I am thrilled to join Daniel Herrold’s team and Northmarq’s rapidly growing investment sales platform,” said Zimmerman. “Providing best in class data and the ability to leverage our debt and equity services are just some of the ways we can bring more value to our clients.” In his new role, Zimmerman joins the commercial investment sales team led by Daniel Herrold, Senior Vice President of Northmarq’s Tulsa office. Zimmerman will be based in Chapel Hill, North Carolina, and brings his expertise to support merchant builders, private owners and institutional clients with their retail investment needs. “I’m excited to have Michael join our team,” said Herrold. “Michael is a veteran in the net lease space having over 20 years of experience in the business. We needed to fill a void in our team of focusing on retail investors and developers throughout the Southeast, and Michael fits that void perfectly with his existing clients and business activity.” Zimmerman is a graduate of San Diego State University and holds a broker’s license in North Carolina and Florida. He is also a long-time member of the International Council of Shopping Centers.

Summary of future growth plans for the top 100 retailers, as selected by brand recognition, expansion rate and frequency of investment sale transactions Average cap rate and sale price information for the most commonly traded retailers Credit rating summary with parent company information Average square footage ranges and store counts for each tenant

Robert Poirier, associate vice president in Northmarq’s Atlanta office, arranged the $9.5 million sale leaseback of a single-tenant industrial property fully leased to Mount Vernon Mills, Inc. The 270, 252 sq. ft. facility is located at 235 River Road in Rockingham, North Carolina. Northmarq represented both the buyer and seller. The buyer was an institutional investor based in Arizona.  “Despite the current market, we were able to create a tremendous amount of interest from a very diverse group of investors, ultimately receiving 18 LOIs during the marketing process,” said Poirier. “At the end of the day, surety of close, and the strong reputation of the investor is what won the deal. Built in 1973, the property is situated on 27.74 acres and serves as a mission-critical facility for Mount Vernon Mills, the country’s largest apparel fabric manufacturer. Mount Vernon Mills’ Rockingham location produces open-end spun yarn and woven greige goods for the company’s flame-resistant products. Offering ample room for expansion, the industrial facility is strategically located right off US Route 220 and less than two miles from US Route 1 and Interstate 74. The tenant operates on a corporate guaranteed absolute triple net lease.

Erik Lundberg, associate vice president in Northmarq’s Tulsa office, completed the sale of two brand new, New England style properties leased to Dollar General located at 580 Lake Road in Andover and 1967 Norwich-New London Turnpike in Montville, Connecticut. Lundberg represented the buyer, a private investor located in Farmington, who acquired the assets for a total of $4.855 million. The seller was a developer based in Torrington.   “Despite the challenges of today’s market, we were able to successfully complete two separate 1031 buy needs, placing our client into two new construction Dollar General build to suits, both in prime Connecticut locations,” said Lundberg.  The newly constructed buildings feature upgraded construction including architectural asphalt shingles, Hardie board siding, decorative lighting fixtures, and New England style windowed dormers. Strategically located just off US Highway 6, the Andover property is 15 miles east of downtown Hartford and seven miles from the University of Connecticut and Eastern Connecticut State University, attracting students and residents across the state. Situated in the village of Uncasville, the Montville Dollar General is a short distance from the Mohegan Sun Casino. Additionally, the property is conveniently located across the street from a Stop & Shop and Home Depot-anchored shopping center and neighbors a McDonald’s and CVS Pharmacy. The tenants operate on a long-term absolute triple net lease.  

Riley Sharman, vice president in Northmarq’s Houston office, has completed the sale of an eight-tenant medical and retail strip center located at 827 Magnolia Boulevard in Magnolia, Texas. The 16,700-square-foot building is fully leased to a diverse mix of strong medical and service-oriented tenants. Sharman represented the seller, a local owner. A 1031 exchange buyer based in Dallas-Fort Worth, Texas acquired the asset.   “The dental partners that I represented were able to maximize value by exercising a ‘partial sale-leaseback’ for their practices, and we ultimately provided them the opportunity to capitalize on a sale to an all-cash, buyer exercising a 1031 tax deferred exchange,” said Sharman. “The interest and offer activity were high due to the long-term leases, strong lease guarantors, and extra acreage behind the strip center for future development, to name a few. This transaction demonstrates the increase in investor demand for multi-tenant medical strip centers we’re seeing throughout the Houston MSA and especially in high-growth areas like Magnolia."   The facility was built in 2012 and is situated on 7.66 acres in the city of Magnolia, an outdoor paradise of biking, hiking, golf, and more approximately 45 miles northwest of Houston. Just across the street from the property is a proposed Magnolia Ridge Development which will bring over 200 homes to one of the best public-school districts in Texas. With excellent visibility and multiple access points, Magnolia Health and Wellness Center boasts prime frontage on Magnolia Boulevard, seeing over 14,000 vehicles per day. Tenants include Hillwood Family Dental Group, Simple Traditions Family Health, Hanigan & Johnson Orthodontics, and Endodontics of Houston.  

Originally published by GlobeSt Nationally it appears that there is insufficient square footage available to accommodate the significant growth seen in the healthcare real estate sector, with the rate of absorption outpacing new product deliveries, according to Northmarq.  “This has put national occupancy rates for medical office at a historic high,” Colin Cornell, Northmarq vice president, healthcare investment sales, tells GlobeSt.com.  “We anticipate a steady stream of opportunities for investors in 2023, including newly developed facilities, new long-term leases on historically vacant MOBs, and retrofits of what were historically retail-oriented buildings.”  Cornell said that like most sectors, healthcare has been in the price discovery stage since interest rate increases began, but values seem to be settling somewhere between 2019 and 2021 levels.  “The investor demand is there, and the question is will owners be willing to meet that demand at the new return buyers requires,” he said.  These investors are best to focus on outpatient services, according to JLL’s most recent Healthcare and Medical Office Perspective, which shows that outpatient sites dominate healthcare services delivery compared to hospital admissions.  Additionally, according to Kaufman Hall National Hospital Flash Report, outpatient revenue rose 8% in 2022, while inpatient revenue was flat when compared to 2021.  JLL’s report said that up to a third of hospital revenue is activity shifting to ambulatory surgery centers, office-based labs, and other ambulatory sites.  “More sophisticated procedures can be done in outpatient settings than possible a decade ago.” Amber Schiada, head of Americas work dynamics and industry research, JLL, said in prepared remarks.  “Innovation in care combined with reimbursement pressures are driving a sustained shift to outpatient facilities, and consumer preferences for outpatient care have increased as well, as outpatient facilities are often more accessible or conveniently located,” she said.  “Furthermore, experience shows that outpatient locations are less expensive to build and operate, produce better-quality medical outcomes, and yield higher rates of patient satisfaction.  MOS and Health Care RE Producing Income  Allan Swaringen, President & CEO of JLL Income Property Trust, tells GlobeSt.com, “Medical office space, and healthcare-oriented real estate more generally, will continue to be a key piece of an income-producing, core fund such as JLL Income Property Trust.  “The extremely positive demographic trends driving tenant demand for this sector, combined with the often-long-term leases of tenants who look to serve their local population and often invest heavily in building improvements, create a scenario where owners can generate long-term, stable cashflow,” he said.  “That’s why we have continued to construct a geographically diversified healthcare-oriented portfolio that today is valued at nearly $635 million and totals approximately 1.4 million square feet.  The Continuum of Care  Andrew Salmon, chief future officer at SALMON Health & Retirement, tells GlobeSt.com that given the aging demographics, “it’s no surprise that we are seeing an explosion in need for outpatient facilities.  “What’s pivotal is the consideration for the continuum of care, as the 80+ population is forecasted to balloon nearly 50% in the next 10 years, and they will require both inpatient and outpatient opportunities as they age.  “Our goal is to establish the continuum of care across the aging population, to ensure that independent and assisted living opportunities exist with convenient, local access to major medical providers, allowing our residents to maximize the outpatient system while maintaining independence.”  Outpatient Services Leads to Higher Satisfaction  Doug King, national healthcare sector lead for Project Management Advisors, tells GlobeSt.com that healthcare providers have been actively positioning outpatient services closer to where their patients reside for at least a generation.  Outpatient facilities typically result in higher patient satisfaction, King said, and the challenges to outpatient facilities presented by telehealth and home healthcare are minimal as many clinical limitations and regulatory challenges exist for these two off-site methods.  “Decentralized ‘brick-and-mortar’ outpatient facilities will continue to grow,” according to King. “A vast majority of care will be occurring in outpatient settings, including urgent care centers, free-standing emergency departments, medical office/doctor offices, and ambulatory care facilities – outfitted to accommodate same-day surgical activities.  “In healthcare, we say, ‘follow the money’ and The Center for Medicare and Medicaid services are reviewing how reimbursement strategies can promote this model. An example is the growth of OBL (office-based labs) to house sophisticated surgical and imaging services performed on an outpatient basis.”  Developing, Rehabbing, Modernizing Facilities  Mitch Creem, principal of GreenRock Capital, tells GlobeSt.com that investors have always viewed medical office buildings as safe investments during uncertain financial times, primarily due to their historically proven resiliency during market downturns.  “But now, 75 years after the Boomer generation was born, we are expecting a ‘gray tsunami,’ fueling the need for additional healthcare services and many more sites of care,” Creem said.  “Physicians, hospitals, real estate investment funds, and individual investors are all keen on developing new sites or rehabbing and modernizing existing buildings to provide state-of-the-art care and attract new patients.”  Deliver Care in Outpatient Settings More Economical  Brian Edgerton, senior vice president, healthcare services team – NAI Hiffman, tells GlobeSt.com that after historic growth in 2021-2022, the sector is not without headwinds.  “It saw rising cap rates and fewer starts and deliveries at the end of 2022,” he said. “In 2022, healthcare real estate developers kept busy delivering modern medical office buildings to accommodate health systems and large multi-specialty practices, including those seeking to consolidate multiple specialties under one roof in highly visible, patient-proximate locations.  “At the same time, developers are feeling the squeeze of construction cost increases, supply chain delays, and interest rate hikes, all of which are reflected in the higher rental rates that must be charged to make these deals pencil out.  “Yet, even if they’re paying more today than they would have a year ago, it is still more economical and efficient for providers to deliver care in outpatient settings, many of which are located in close proximity to where their patients live and work.”  Edgerton said that like retail, healthcare increasingly follows rooftops, “so services are moving closer to the patient thanks to technological advancements that can more easily be implemented in newly developed and repurposed buildings, rather than the medical office building of 30 years ago.”  When Choosing Project Sites, Demographics Matter  Craig Gambardella, vice president at TSCG MD, tells GlobeSt.com that clients understand that their property, and a potential fit for an outpatient healthcare facility within that particular property, is crucial in their decision-making.  “You must look at demographic, psychographic and prevalence of diseases in certain trade areas, and 5- to 10-year projected growth of not only disease prevalence, but how that translates to outpatient demands to help health systems forecast potential growth,” Gambardella said.  For example, the owner of a large mall that is looking to repurpose a portion of it into medical must accurately forecast the demand in that area for an outpatient facility, what types of clinical services may be needed, based on disease prevalence and 5- to 10-year projected growth, he said.  A Continued Extension of Outpatient Services  Rich Steimel, senior vice president and principal in charge, healthcare, New York, at Lendlease said that throughout the industry, more procedures are taking place away from the main clinical facilities as there is a continued extension of outpatient services across metro areas and into the suburbs.  “This shift allows hospital campus operations a greater opportunity to expand and connect with a growing base of patients who require critical care but desire the convenience of off-campus facilities.”  © 2022 ALM Global Properties, LLC. All rights reserved.