Lincoln Property JV to Own, Operate Manhattan MOB
Real estate private equity firm Blue Arch Capital, global real estate owner/operator Lincoln Property Co. and real estate investment manager LoanCore Capital have formed a strategic partnership to own and operate Park Sixty, a Class A medical office building at 110 E. 60th St. in Manhattan, the three companies announced Monday.
No dollar amount on the transaction was disclosed. Eastdil Secured acted as exclusive advisor to LoanCore.
The block-through, 15-story property is in the Plaza District at 60th Street between Park and Lexington avenues and near the East Side Medical Corridor.
Park Sixty features 179,000 square feet of medical office space and 7,000 square feet of retail space on the first two floors. In 2018, the building completed a $20 million, Article 28–compliant renovation that included the installation of state-of-the-art infrastructure, including a new rooftop cooling tower; a new lobby; and upgrades to all common areas. Amenities include a 24/7 attended lobby and easy access to the 59th Street subway line.
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None of the three companies replied to Commercial Property Executive’s request for additional information.
The building’s website indicates that 99,022 square feet of medical space are currently available, which suggests about a 55 percent vacancy.
Park Sixty was built in 1962, according to information provided by CommercialEdge, which also indicates that the previous owner was LoanCore Capital (REO). A $5 million foreclosure sale is on record for September 2023. An arm’s length sale in January 2015 was reported to be valued at $170 million.
MOB mentality
In July, LoanCore funded an $85 million refinancing loan for a joint venture of Goldman Sachs Urban Investment Group and Triangle Equities, for the first two floors of Terminal Logistics Center, a 300,000-square-foot, five-story industrial condominium in New York City’s Queens borough. Institutional Property Advisors Capital Markets, a division of Marcus & Millichap, arranged the financing.
Elevated interest rates and economic uncertainty have restrained transaction volumes and pricing in the health-care capital markets over the past 12 months, according to a first-half 2024 report from Cushman & Wakefield.
The report states that the significant surge in volume and pricing for medical office building sales between 2020 and early 2022 has slowed, as the macro-economic landscape continues to recover from inflation and subsequent rate hikes.
Still, an absence of the overbuilding seen in other product types has helped to moderate MOB occupancies.
Cushman & Wakefield predicts “growth in transaction activity as the debt and equity markets gain confidence in raising their acquisition targets.”
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