A nine story, 135,000 square foot medical office building. Connected to Palmetto General Hospital.
Acquisition: October 2010 (as part of a nine building medical portfolio in South Florida).
Disposition: September 2013.
IRR: 41% (as part of the portfolio)
At Acquisition:
Palmetto Medical Plaza had significant deferred maintenance. The building needed both extensive repairs and a new image. Furthermore, 30% of the physicians were of retirement age.
After Acquisition:
We repositioned the property and reintroduced it to the market as a higher asset class and a worthy alternative to its competition. Over a two-year period, we implemented an extensive $1.7 million capital improvement project. Work included replacing the cooling towers, mechanical equipment systems, and major renovations to the common area interiors. We completely redesigned the lobby areas and restrooms, refurbished four elevators and rehabbed many of the medical suites. As part of our platform, we developed and cultivated relationships with the hospital executives and existing tenants. We instituted our gold standard level of service in all facets of leasing, property management and maintenance. Our tenant retention programs include property events, one-on-one tenant meetings, web-based maintenance tracking programs.
Results:
Our efforts generated strong leasing activity and an above-market renewal rate. Through improved management and the repositioning of the property, we secured multiple practices from nearby competing properties. From the three years following acquisition, we increased occupancy from 77% to 93% while increasing the rental rates by more than 10%.
