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Class A Medical Office Building For Sale in San Diego

Tuesday, August 09, 2016

Torrey Hills Medical Plaza for sale in San DiegoOn behalf of the owners, HFF is marketing for sale the 100 percent fee simple interest in Torrey Hills Medical Plaza, a 44,156-square-foot, Class A, institutional-quality medical office building. Constructed in 2005 and anchored by investment-grade rated Fresenius Medical Care (Moody’s: Baa3), the office building for sale is in the highly-affluent Del Mar Heights/Carmel Valley submarket. The property features abundant parking with an exclusive, connected two-level parking garage, a diverse medical and dental tenant composition on triple net leases and freeway accessibility to all areas of San Diego.

Torrey Hills Medical Plaza is situated on 2.59 acres at 4765 Carmel Mountain Road, which has daily traffic counts exceeding 20,000. Located in the northern part of San Diego in what is locally known as the “coastal freeway corridor gateway,” the medical property for sale is minutes from State Road 56 and Interstates 5 and 805. University of California, San Diego’s Thornton Hospital; Scripps Research Institute; Scripps Memorial Hospital; The Salk Institute San Diego and the VA Medical Center all provide a large and talented tenant base all within a five mile radius.

The medical office building for sale is within the Torrey Hills Center, a 100,000-square-foot neighborhood shopping center anchored by Vons. Additional tenants include Wells Fargo, Starbucks, Orangetheory Fitness and a variety of other food and service tenants offering desirable amenities to Torrey Hills Medical Plaza’s tenants and their clients.

Medical Office Building Investment Benefits

  • Highly-Sought-After Submarket with Exceptional Demographics: Torrey Hills Medical Plaza is located within the Del Mar Heights/Carmel Valley Medical Office Building for Sale in San Diegosubmarket, one of the most affluent and highly-educated communities on the West Coast. The immediate one-mile radius encircling the property boasts an executive housing market with a median housing value of more than $1 million and an average household income of nearly $185,000. This area is home to exceptionally-educated residents, as more than 53 percent of local residents possess post-graduate degrees, compared to 13 percent for San Diego.
  • Investment-grade anchor tenant: Investment-grade tenant (Moody’s: Baa3) Fresenius Medical Care (NYSE: FMS), leases 14,616 square feet, or 33 percent, of the rentable space on an absolute triple-net basis through October 2020. Worldwide, Fresenius Medical Care is the No. 1 ranked provider of products and services for people with chronic kidney failure. The growing company has more than 60,000 employees and serves 70,000 patients with more than 2,200 dialysis clinics in the U.S. alone. Fresenius Medical Care has been a tenant at Torrey Hills Medical Plaza since the property’s inception in 2005, increasing their likelihood of renewing.
  • Strong In-Place Cash Flow: Torrey Hills Medical Plaza provides a strong in-place cash flow through its 91.6 percent occupancy with all leases on a triple-net basis, translating to a robust in-place net operating income of more than $1.5 million. Industry-related tenants create a synergistic medical profile for local consumers’ medical and dental needs. Additionally, the medical property for sale provides a desirable rollover profile, with only 5.3 percent of the net rentable area expiring over the first three years of the analysis, offering investors stable near-term yields, while having minimal leasing exposure until the fourth year of their hold period.
  • Rare High Barriers-to-Entry Opportunity: The Del Mar Heights/Carmel Valley submarket is renowned for being home to a major concentration of research and technology companies that surround the University of California, San Diego, just minutes from Torrey Hills Medical Plaza. With only five medical office buildings within the Del Mar Heights/Carmel Valley submarket, the exclusivity has led to a current vacancy rate of just three percent and rental rates that have increased 16 percent over the past two years. Torrey Hills Medical Plaza has an exceptional historical occupancy (more than 95 percent) retention ratio, and asking rates that have reached $3.75 triple net due to a curated tenant roster with highly specialized spaces.

Medical Commercial Property for Sale in San DiegoTorrey Hills Medical Plaza represents a generational opportunity to acquire a core-quality medical office asset in one of the premier submarkets in the country, providing an investor stable in-place cash flow with an investment-grade rated anchor tenant in a community. For more information on this or other commercial properties for sale in the San Diego area, contact HFF Managing Director Evan Kovac, Senior Managing Director Nick Psyllos or Director Nick Frasco in HFF's San Diego Office.

Holliday Fenoglio Fowler, L.P., acting by and through Holliday GP Corp., a real estate broker licensed with the California Department of Real Estate, License Number 01385740.

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