A joint venture of two Houston-based medical office development firms has received $28 million in financing for a 191,676-square-foot, Class A medical office building in Houston’s Heights neighborhood.
Madison Realty Capital (MRC) facilitated the first mortgage loan, which will partly be used to renovate the property. Collateral for the loan includes the main building as well as three nearby parcels used as parking for doctors, staff and patients.
In 2017, medical office development firm AMD Global acquired and renovated the six-story asset, allowing for an expanded tenant roster and additional services at the property.
“Our analysis showed medical office as a bright spot in the Houston office market, also evidenced by other institutional investors closing medical deals there recently,” Josh Zegen, MRC’s co-founder & managing principal, told Commercial Property Executive. “Within the medical realm, there’s a particular demand for outpatient facilities and medical offices outside the traditional hospital campus and this property checks those boxes.”
Located at 1917 Ashland St., the asset is currently 95 percent leased to a tenant roster that includes CuraHealth and St. Joseph Medical Center.
Houston’s oldest planned community
The Heights, which was Houston’s first master-planned community, is known for its numerous commercial amenities. The historic section has long been a favorite among both residents and visitors, due to its eclectic boutiques, antiques shops and the popular First Saturday Arts Market.
According to Cushman & Wakefield’s latest Houston report, the office market in the area showed rising improvement, with an increase in leasing activity, a lower availability rate and a dip in total sublease space.
In May, MRC secured a $35 million first-mortgage loan for the redevelopment and expansion of the currently vacant building at 90-75 Sutphin Blvd. in Queens, New York.
Image courtesy of Madison Realty Capital