June 24, 2021 9:00 AM
Newmark Knight Frank (“Newmark”) announces it has arranged the $64.4 million sale of 1720 El Camino Real, a 106,018-square-foot medical office building located in Burlingame, California.
Newmark’s Vice Chairman and Head of Northern California Capital Markets Steven Golubchik, alongside Senior Managing Director Seth McKinnon, Executive Managing Director Ben Appel and Director Darren Hollak represented the seller, Angelo Gordon & Company, in the transaction to buyer, Morgan Stanley.
“1720 El Camino represents a rare opportunity to acquire a Class A medical office building in the severely supply-constrained San Francisco Peninsula market,” said McKinnon.
The property sits immediately adjacent to the 241-bed, acute care Sutter Health Mills-Peninsula Medical Center, a hospital that serves 3.6 million people in the region, accounting for approximately 20% of the population over the age of 65. 1720 El Camino is anchored by investment-grade tenants Sutter Health, Stanford Health Care, and DaVita.
The property features recently renovated common areas, extensive medical buildouts that include a 10,300-square-foot endoscopy center in the Sutter Health space, and a 5-story, 396-stall parking garage providing direct access into the building from each floor. The building’s immediate proximity to the hospital allows for higher outpatient reimbursements and provides existing and future tenants the ability to benefit from complimentary practices to create a strong referral network. Additionally, the building is in proximity to BART and Caltrain stations and 101 and 280 Freeways.
The San Francisco Northern Peninsula Medical (“Northern Peninsula”) market is broadly defined as Daly City to the north and the city of San Mateo to the south. The total market consists of 23 buildings, totaling over one million square feet, and is historically known for its consistently low vacancy rates and under-supplied quality medical office buildings, according to Newmark Research. The current average Class A asking rate for the Northern Peninsula market is approximately $4.12 per-square-foot, while the competitive set has an average asking rate of $5.23 due to the above standard quality of the product, location and patient experience.
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Our comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, growing startups to leading companies. In 2020, Newmark generated revenues in excess of $1.9 billion. Newmark, together with London-based partner Knight Frank and independently owned licensees, operates globally from approximately 490 offices with 19,300 professionals. To learn more, visit nmrk.com or follow @newmark.
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