Medical Office Building for Sale in Greater Las Vegas

Monday, October 30, 2017

HFF, on behalf of the owner, is marketing Parkway Medical Plaza for sale. Parkway Medical Plaza (PMP) is an 86,729-square-foot (88,958 per BOMA re-measurement), institutional-quality medical office building located in Henderson, Nevada, the most desirable suburb in the Las Vegas MSA. This Class A asset has attracted a diverse and synergistic tenant roster with desirable local amenities and ample parking, offering high-acuity services such as an ambulatory surgery center, imaging, nephrology, pathology, internal medicine, family medicine, primary care, rehabilitation, OBGYN, physical therapy, laboratory and stem cell therapy. 

Parkway Medical Plaza is located at 100 N Green Valley Parkway within Henderson’s Green Valley community, a highly dense and affluent master planned community. Located three miles from Dignity Health – St. Rose Dominican – Siena Hospital, the medical office property for sale is highly visible from Interstate 215. The immediate five-mile radius encircling the property boasts a population that totals over 300,000 residents, projected to grow by 7.04 percent by 2022, outpacing the 5.86 percent growth expected for greater Las Vegas. Henderson has been the recipient of numerous recent awards, including being named "America’s Second-Safest City" (Forbes), One of  the "Best Cities to Live in America" (Bloomberg Businessweek) and, most notably, is the seventh highest per-capita income in the United States.

PMP is anchored by Parkway Surgery Center and DaVita HealthCare Partners. Parkway Surgery Center is a joint venture between not-for-profit Dignity Health – St. Rose Dominican (S&P: A) and United Surgical Partners International (USPI), which is majority owned by Tenet. USPI is the nation’s largest ambulatory surgery provider. The other 11 tenants within PMP often refer patients to one another and offer high acuity services that includes, imaging, nephrology, pathology, internal medicine, family medicine, rehabilitation, OBGYN, physical therapy, primary care, and stem cell therapy. In addition to the appealing referral base, tenants have been attracted to PMP because of its prominent highway visibility, location near Dignity Health – St. Rose Dominican – Siena Hospital, ample parking (5.11 per 1,000), numerous restaurants and other amenities in walking distance, proximity to The District at Green Valley Ranch and desirable demographics. A new owner has the opportunity to enhance value in a variety of ways, including continuing the current owner’s program of converting the in-place tenants to triple net leases while leasing the remaining 11 percent currently vacant space in a landlord favorable submarket.

Medical Office Building for Sale Investment Highlights

  • Rare Class A Medical Office Building Opportunity within the Premier Las Vegas Submarket:  Parkway Medical Plaza represents the rare opportunity to acquire a true Class A quality medical office building in the Las Vegas market. Within the metro, there are only 18 medical office buildings that CoStar considers Class A and only three within Henderson. Built in 1997 with superior steel and concrete construction, the current owner of PMP has achieved some of the highest rents in Las Vegas. 
  • Excellent Value-Add Opportunities:  A new owner has the ability to significantly increase income within a short period of time at PMP through several avenues. There is currently 9,189 square feet of vacant space with strong tenant interest. With in-place rents currently 11 percent below market, and 65 percent of the in-place tenancy rolling within the first five years, marking rents to market upon roll will drive additional value. Further opportunity exists as four tenants are being charged rent based on their usable square footage as opposed to rentable square footage, representing a difference of 2,229 square feet. Additionally, 76 percent of the square footage is on FSG base year leases. There has been success in converting to triple net leases (NNN); several new leases have been signed as NNN leases, and tenants have been converted from FSG to NNN leases at renewal and all LOIs currently in negotiation are NNN leases.
  • Resurgent Medical Office Fundamentals:  The Las Vegas Class A medical office market has seen a resurgence in absorption due to expanding health systems, led by Dignity Health, which is planning to open four micro-hospitals by the end of the year. Since the second quarter of 2013, vacancy rates have dropped by 1,470 basis points to 10.5 percent currently. Opportunity exists in the rental rates, which are currently 27 percent below prior peak in 2011. As a result of improving market conditions, institutional investors have been investing heavily in the metro as current prices are still well below replacement cost.
  • Diversified Las Vegas Economy:  Despite its historic focus on gaming, the city’s economy has become a beacon for healthcare, defense, manufacturing, renewable energy and information technology. Las Vegas has become the beneficiary of $14 billion in investment for projects currently planned or under construction, including the $2 billion football stadium for the Las Vegas Raiders, the $4 billion Resorts World, $1.6 billion Fountainebleau Casino and the new $200 million UNLV School of Medicine. Major billion dollar investments from companies such as Faraday Future and Switch Communications demonstrate the continued corporate growth of Las Vegas. Furthermore, public projects, including the $2.3 billion expansion of the Las Vegas Convention Center and the $1 billion Project Neon freeway initiative, illustrate the city’s commitment to invest in the continued growth of Las Vegas. 

For more information on Parkway Medical Plaza or other properties for sale in and around Las Vegas, please contact Jules Sherwood. To view HFF’s current real estate investment listings, please click here to be directed to HFF’s property search page. HFF's healthcare group advisors have experience in securing transactions for all types of healthcare real estate assets, including medical office buildings in the western United States. For more information on other healthcare properties for sale in the western United States, contact Evan Kovac or Andrew Milne.

Jules Sherwood is a licensed real estate broker in the state of Nevada, along with Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp (collectively, “HFF”).

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