UNITED STATES - ING Clarion Partners is looking to invest at least $200m (€146m) in the medical office building sector in the next several years as the firm believes returns are 1% better than in traditional offices.
At this stage, capital will be sourced through commingled funds but separately-managed account pension fund clients could be brought into the mix at a later date, according to
Ed Rotter, managing director for ING Clarion.
"There are several factors in why we believe in the property type now and in the future but one is returns said Rotter.
"We think that in today’s marketplace you can achieve a 50 to 100 basis point spread on returns for medical office purchases, in comparison to traditional office buildings.
"Another factor is tenant demand. We are seeing that some hospitals are now moving some of their business to adjacent medical office buildings. These will create a need for more space in the future. And this, coupled, with a growing elderly population will, in general, lead to even more demand for medical office," added Rotter.
ING Clarion is looking to invest in many medical office markets across the United States. But its focus at this stage is in the Sun Belt region as well as the east and west coasts.
The real estate manager has closed on two deals in the last 30 days, including the purchase for $28m of the 70,000 s.f. Valley Parkway Health Centre in Escondido, California, a sub-market of San Diego which was recently named among the best places to retire in the western part of the Untied States.
A second transaction was the $18.3m acquisition of the 68,000 sf Conroe Medical Arts and Surgical Plaza in Conroe, Texas which, according to Rotter, is a "rapidly growing area and should see significant increase in the demand for healthcare services over the next several years".
