Brookfield has teed up a medical-office building in Northern Virginia that’s expected to trade for about US$46m ($63m), Green Street News can reveal.
The 153,000 sq ft Arlington Medical Center is at 1005 North Glebe Road in Arlington. At the estimated valuation of US$301/sq ft, the initial annual yield would be 8%, but a buyer could lift that by filling vacant space with more medical tenants. CBRE has the marketing assignment.
The building is 67% occupied, with 15 medical tenants taking up 89,000 sq ft. The largest, Inova, which is the state’s largest healthcare provider and has an investment-grade credit rating, occupies 17% of the space.
Other tenants include Azura Vascular Care (7%) and Virginia Heart (7%). The weighted average remaining lease term is 6.2 years.
A buyer could recruit additional medical tenants, which tend to have a higher renewal rate and pay higher rents than traditional office users. The property is less than a mile from VHC Health, a 453-bed hospital. Medical-office space in the surrounding area is more than 90% occupied.
The 1988-vintage building underwent US$4.8m of recent renovations including upgrades to the lobby and amenities. There are 342 parking spaces. The property is in the Ballston neighborhood, known for its affluent, educated residents and concentration of shops, restaurants and hotels.
The property was part of a 2.4m sq ft portfolio of 12 office assets that Brookfield acquired for US$766m in July 2021 from Washington Real Estate Investment Trust.
