Range Vista Medical Building
8300 Alcott Street, Westminster, Colorado

In April of 2011, the Range Vista Medical Building was purchased as a “value add” investment opportunity with a group of local Investors. The property is a 28,034 square foot, three story medical office building strategically located directly across the street from St. Anthony North Hospital (a full-service, acute-care community hospital) and adjacent to the Panorama Pointe Senior Housing Project (150 mixed-income senior rental units and an additional 74 assisted-care rental units). The building is comprised of ten to eleven suites that range in size from 780 to 7,502 square feet.

In 2005, the property was purchased by a California based investor for $5,100,000; however, they were not able to effectively manage the property from out of state and suffered a major loss of tenancies due to market conditions and a “hands off” approach. In late 2010, the property was taken into receivership and we were able to reach an agreement with the Seller, Receiver and Lender to acquire the property in a “pre-foreclosure” sale for $2,350,000 ($85 per square foot, which is roughly 50% of replacement cost for comparable medical properties). At the time of closing, the property was 43% occupied by four medical tenants (and a few roof top cell phone users); however, we were able to secure an additional lease only 30 days after closing. This new lease consisted of 5,420 square feet, which brought the occupancy up to 62%. The investment thesis was to acquire the Property with 100% cash (plus the necessary initial reserves) and then secure a working line of credit to be used for common area improvements and re-tenanting of the remaining vacancies (estimated at approximately $900,000). Once stabilized (which was projected to be 12 to 18 months from acquisition), a short-term loan would be placed on the Property in order to allow the investors to retire the working line of credit and pull out the majority (if not all) of the initial equity. The property would either be sold at a market cap rate or held for long term cash flow (dependent upon market conditions). Despite being only 43% leased at the time of acquisition, the property immediately had positive cash flow and is projected to have an IRR in the range of 20% to 22% over a three year hold.

Through a joint venture, Signature Partners and Centum Health Properties syndicated this investment opportunity. Signature Partners provides the strength in investor relationships, financing and asset management, while Centum Health Properties excels in medical property management, medical tenant relationships, leasing and a high level of market knowledge of the Denver Metro medical community. Signature Partners and Centum Health Properties successfully worked together on the Highlands Ranch Medical Building from 2002 until the disposition of the asset in early 2010. Based on the collective areas of expertise, both entities felt that a joint venture relationship would provide this investment (and the Investors) the utmost professionalism and highest probability of success.