NAPA -- A New York-based health care real estate firm has closed on the Trancas Medical Center, a 65,000-square-foot medical office building adjacent to Queen of the Valley Medical Center, for $11.2 million and plans significant upgrades to the building.
Seavest Healthcare Properties purchased the building, which houses the Napa Women's Health Care Center, Harvest Pediatrics and some Queen of the Valley physicians. The Trancas Center will be managed by SKS Medical Properties, the health care real estate division of commercial real estate firm SKS Investments in San Francisco.
"To benefit both the tenants and the long term performance of the building, we will implement institutional quality management and make significant upgrades to the property," said Paul Stein, managing partner of SKS Investments.
Seavest said it plans to invest up to $2.5 million in the building, while SKS Medical said the acquisition is part of a broader effort to capitalize on the trend of increased outpatient facilities by health organizations such as St. Joseph Health System, which operates Queen of the Valley. The group said it is seeking to expand its relationships with health care systems "to provide solutions in an environment of greater cost scrutiny and capital constraints."
"Our goal with SKS Medical Properties is to leverage SKS Investments' expertise in acquisitions, development and management of life science, health care, and office real estate to develop a portfolio of outpatient health care real estate," Mr. Stein said. "Opportunities to work with preeminent systems such as ... St. Joseph Health System are essential to the success of the platform."
The property was in foreclosure, according to Seavest. Its previous owners, Napa Medical Building Investors, paid $17.5 million for it in 2007 and made improvements of $2 million.
Queen of the Valley has leased about 35 percent of the building, which is about 85 percent leased in total, according to Seavest.
SKS Medical will carry out the building upgrades and will work as the local operator for Seavest. SKS also said it is looking for additional healthcare real estate opportunities in the North Bay and the Western U.S.