Daly City Medical Office Asset Trades for $41MM, 37% Bump In Under Four Years

HR of California, Daly City, Physicians Medical Center, Harrison Street Real Estate Capital, Pinnacle Capital Management Services, San Francisco, Swift Real Estate Partners, CBRE

By Jon Peterson

HR of California LLC has become the new owner of an office building in Daly City with its acquisition of the 70,705 square foot Physicians Medical Center property located at 901 Campus Drive. The purchase price on the property was $41 million, or roughly $580 per square foot, according to public records.

The seller of the property was a joint venture of Chicago-based Harrison Street Real Estate Capital and Los Angeles-based Pinnacle Capital Management Services. A company representative for Harrison Street stated in an email that the investment firm would decline to comment for this story.

The most recent sale of the property means it has now traded hands for the third time in the past eight years. Harrison Street and Pinnacle Capital had acquired the property in July of 2018 for $30 million, according to sources familiar with the property. These two firms had purchased the asset from San Francisco-based Swift Real Estate Partners, which had paid $9.6 million for the property in November 2014.

The property in Daly City has a strong location. It is located on a site that is 2.48 acres and is one mile from two local hospitals. These are the 357-bed Seton Medical Center and the 120-unit South San Francisco Medical Center.

The complex in Daly City was part of an eight-property medical office property portfolio that was sold by Harrison Street and Pinnacle Capital earlier this month. The portfolio was sold for $215 million with a total square footage of 380,000 square feet. The assets in the portfolio were located in a mixture of markets that included San Francisco, Santa Rosa, Alameda, Greenbrae and Los Angeles.

The seller of this portfolio was represented by Chris Bodnar, Lee Asher, Jordan Selbiger, Ryan Lindsley, Sabrina Solomiany and Zach Holderman of CBRE’s U.S. Healthcare & Life Sciences Capital Markets team. CBRE did not respond to an email and phone call seeking comment for this story.

Harrison Street had compiled the portfolio through investments for several of its commingled funds for which it had raised capital. The fund manager is known mainly as an investor in commingled funds that looks to purchase assets in the medical office, life science, data center, senior and student housing, self-storage assets and build-to-rent housing property types across the country.

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