(EDITOR’S NOTE: Swift had placed the property on the market in April of 2018 after owning the asset since November of 2014. At that time, the real estate investment firm paid $9.6 million, or $127 per square foot, for it. The land underneath the property is owned by the Jefferson School District in Daly City, and the ground lease runs until 2084.)
SAN FRANCISCO, CA – July 19, 2018 – HFF announces the $30 million sale of and the $25 million financing for Physicians Medical Center, a 70,705-square-foot, purpose-built medical office building immediately south of San Francisco in Daly City, California.
The HFF team represented the seller, Swift Real Estate Partners, and procured the buyer, Pinnacle Capital Management Services (PCMS) and joint venture investment partners, Harrison Street Real Estate Capital LLC. Additionally, the HFF team worked on behalf of the buyer to secure the non-recourse, floating-rate acquisition loan through one of its relationship lenders.
Physicians Medical Center is located at 901 Campus Drive just 15 minutes from the Financial District and San Francisco International Airport and one mile from two local hospitals; the 357-bed Seton Medical Center and the 120-bed South San Francisco Medical Center. The property is situated on 2.48 acres within one of the strongest medical office markets in the country with excellent highway accessibility via Interstate 280 and State Routes 35 and 1. The population within a three-mile radius of the building is more than 172,000 residents earning an average household income of $111,356. The three-story building is 92 percent leased – the majority to two nationally recognized anchor tenants, Palo Alto Medical Foundation – Sutter Health and Campus Surgery Center – AmSurg/Envision Healthcare.
While under ownership, Swift improved the building’s interior and exterior. Interior upgrades included a full lobby renovation, mechanical and elevator upgrades and interior signage replacement. Exterior improvements included envelope, lighting and landscape upgrades as well as an asset signage package. In addition to the building’s upgrades, Swift stabilized the asset with longer-term leases, including two anchor tenants.
“We are delighted to close our second successful transaction with Swift and initiate our first with the team at HFF,” said PCMS CEO, Paul Slye. “Physicians Medical Center joins our growing portfolio of managed and joint venture investments with Harrison Street Real Estate Capital. The fundamental strengths of this location and property will be enhanced as we continue to improve the property and strengthen its institutional grade tenant base.”
The HFF investment advisory team representing the seller included managing director Evan Kovac and director Andrew Milne, members of HFF’s national healthcare capital markets group, and director David Dokko from HFF’s San Francisco office.
HFF’s national healthcare debt and equity placement team representing the borrower consisted of senior directors Zack Holderman and John Chun and senior associate Trent Jemmett.
Holliday GP Corp. (“HFF”) is a real estate broker licensed with the California Department of Real Estate, License Number 01385740.
About Swift Real Estate Partners
Founded in 2010, Swift Real Estate Partners is headquartered in San Francisco, and has regional offices in Orange County, Portland, the San Francisco East Bay and the Silicon Valley. Swift is a vertically-integrated real estate investment firm which seeks to generate superior risk-adjusted returns for its partners. Swift acquires and repositions office and industrial assets in select West Coast markets, identifying unique opportunities and executing well-defined business plans while providing real-time, day-to-day oversight for each investment. Since inception, Swift has owned and operated real estate valued in excess of $3 billion across more than 10 million square feet. Swift’s first institutional fund was raised in 2013 and is fully deployed. Swift’s Fund II was raised in 2016 and is substantially committed. Swift’s investor base includes U.S. pension funds, endowments and foundations, as well as foreign investors and investment advisors. Swift’s professionals bring experience encompassing all aspects of real estate investment and management, including acquisition, financing, leasing, disposition, and construction management, property management and creative and marketing services.
About Pinnacle Capital Management Services
Pinnacle Capital Management Services, LLC (“PCMS”) is a growing full-service developer, owner and operator that owns, manages and is redeveloping over $350 million in commercial real estate investments. PCMS was founded by Paul Slye as a successor entity to a general real estate operating platform that focuses on medical office, life science and related healthcare and health sector opportunities.
About Harrison Street Real Estate Capital LLC
Harrison Street Real Estate Capital LLC (“Harrison Street”) is one of the leading real estate investment management firms exclusively focused on the Education, Healthcare and Storage sectors. The firm has created a series of differentiated investment strategies across multiple risk/return platforms. Headquartered in Chicago, the firm employs a 120-person team with approximately $14.6 billion in assets under management. For more information, please visit www.harrisonst.com.
HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform, including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. HFF, HFF Real Estate Limited, HFF Securities L.P. and HFF Securities Limited are owned by HFF, Inc. (NYSE: HF). For more information, please visit hfflp.com or follow HFF on Twitter @HFF.