Developers chasing investor dollars for healthy medical office space - Baltimore Business Journal:

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The health care real estate developmenrt and project management company is buildinga $40 million investment fund to acquire and develop medicaol clinical space around the country. Tom a partner in the says the firm expects to be able to offer returns for investors because medical space has held its valu relatively well during the past coupleof years. “Evenh in the down economy, it’s been prettyy stable,” he says. “We’re just tryingg to take advantageof what’sx out there.” The plan is to put significanyt cash into deals — paying for 40 percentt to 50 percent of a developmenr or acquisition out of pocket.
That up-front equity, alonf with plans for long-term ownership, will take much of the risk out of Gibson says. The Nashville-based firm has 15 yearxs of experience in medical real having developed and managed more than 100 medical officez and clinics in30 states. So far, the firm has raisefd about $6 million toward the goal. It has been in talks with large institutional investorz and individuals to reach the targer by the end of but it’s already moving forward with the money in “We have a pretty good pipeline of developmentt that we’re working on that we’d like to role into the says Bond Oman, a partneer in the group.
The new fundw should allow Oman-Gibson to double its business in the next yearor two, Oman The mix will be about 40 percent new developmengt to 60 percent acquisitions of existing properties, Oman says. Most of thosw will be single-tenant such as doctors’ offices and ancillary services likeelectronixc imaging, with prices between $3 million and $10 The goal in acquiring properties will be to gain value in the whether that be landing discounted pricex from sellers who need the cash or re-negotiating leases for longerf terms, adding stability to a property’s income.
The firm has abouft six development properties already in the pipeline but not off the grounr that the fund might helpmove forward. “We’rr looking at returns and taking a lot of the risk out of Oman says. Many in the real estate industryu are trying to capitalize on thedown market, in all says J.T. Martin, head of the healtyh care real-estate division at Nashville-based Southeast Ventures. in medical real estate, there still is a large gap between the price expectationxs of buyersand sellers, he “Either the banks haven’t squeezed them hard enoughj for them to have to sell, or they think they can hold Martin says.
But by lookingy nationally, Oman-Gibson will have a better chancd of findinggood deals, he says.