DUMFRIES, VA., May 8, 2020 – Institutional Property Advisors (IPA), a division of Marcus & Millichap (NYSE: MMI), announced today the sale of Dumfries Health Center, a 99,718-square-foot medical office building in Dumfries, Virginia. The single-tenant building is leased to Spectrum Healthcare Resources on a long-term basis. The asset sold for $19.25 million.
Constructed in 2009, Dumfries Health Center is a world-class healthcare facility serving active and retired military personnel and their families throughout the Washington, D.C. region. The building received significant upgrades recently to allow for additional services including urgent care, immunizations, sports medicine with state-of-the-art wading pools, and an expansion to its existing on-site pharmacy.
“Medical office continues to be a highly sought-after asset class, however, with everchanging trends in the healthcare sector, government-backed, third-party operators are becoming a new trend and add a further layer of security for investors,” said Randall Heilig, IPA vice president investments. “This trend, coupled with the asset’s proximity to Marine Corps Base Quantico and the surrounding D.C. suburbs, made it a one-of-a-kind opportunity for the buyer.”
Robert Filley, IPA first vice president investments said, “There were a lot of moving parts given it is a completely new way of administrating healthcare services to military personnel.” Filley noted he believes the industry will be seeing more of these large-scale, contractor-run medical facilities rolling out nationwide in the coming years.
The property was purchased with an existing CMBS loan in place. “While many groups were turned off by the need to assume an existing, in-place loan, we were able to find the right group for the deal who was willing to put in the extra time and effort to see it through despite the recent uncertainty surrounding COVID-19 and its strain on the healthcare community,” noted Chandler Pace, IPA senior associate.
Filley, Heilig, Pace and Chris Dale represented the seller, 3700 Fettler Park LLC, and procured the buyer, Bethesda, Md.-based Global Medical REIT (NYSE: GMRE).
Dumfries Health Center is a family clinic of Fort Belvoir Community Hospital and is one of the largest privately run medical office buildings in the region. The clinic serves approximately 28,000 registered military personnel and their families and is located at 3700 Fettler Park Drive. 30 miles south of Washington, D.C.
“While COVID-19 has presented challenges for medical offices oriented to non-emergency services, it also highlights the need for these services and the offices that provide them,” said Alan Pontius, senior vice president of Marcus & Millichap’s office and industrial division. “The long-term outlook for medical office investments is as strong as ever and setbacks caused by the global health crisis will be mitigated by a surge of pent-up demand for health-related provider services, which will be a key element of a full recovery.”
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About Institutional Property Advisors (IPA)
Institutional Property Advisors (IPA) is a division of Marcus & Millichap (NYSE: MMI), a leading commercial real estate services firm in North America. IPA’s combination of real estate investment and capital markets expertise, industry-leading technology, and acclaimed research offer customized solutions for the acquisition, disposition and financing of institutional properties and portfolios. For more information, please visit www.institutionalpropertyadvisors.com.