A Novant Health Inc.-leased building has been purchased for $21.5 million in one of the largest single medical real-estate sales in recent Forsyth County history.
The 38,904-square-foot property at 3155 Maplewood Ave. has Novant Imaging providers as the tenants.
The buyer is Catalyst Healthcare Real Estate of Pensacola, Fla., a nationwide full-service health-care real estate investment firm.
The seller is a company wholly owned by Front Street Capital, a local development and asset management firm.
Ben Bloodworth, a partner with Linville Team Partners, was the lone broker involved.
The sale is part of a larger trend of the past four years involving out-of-state real-estate groups buying medical facility properties in the Triad.
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The largest combined transaction occurred in October 2019 when high-profile Chicago medical real-estate investment trust MB Real Estate spent $83.86 million to buy seven Forsyth County properties that Novant leases.
The most expensive purchase was an MB affiliate who paid $33.4 million for the Winston-Salem Health Care facility at 250 Charlois Blvd.
Altogether during 2019, the MB Real Estate affiliates spent a combined $156.75 million on 15 Triad healthcare properties.
John H. Boyd, with site-selection firm The Boyd Co. of Boca Raton, Fla., said medical facility real estate in the Triad has become as attractive as their commercial and industrial counterparts.
“Strong economic, demographic and technological drivers are all in place now, providing strong tailwinds to the growing health-care REIT activity being seen now in the Triad,” Boyd said.
“Especially attractive real-estate investments are outpatient medical office buildings, due to the growing demand for a more patient-centered health-care delivery.”
Boyd said the “graying of the U.S. population materially increases the health-care demand from seniors.”
“Other trends being factored: new health-care building construction around the country is not nearly keeping pace with demand; and the fact that since Affordable Care Act went into effect, millions of Americans that did not have access to health insurance now do and are showing up at doctors’ offices in record numbers,” he said.
“With more covered patients and more dependable foot traffic, there are more payments coming into the system and less risk of default on rents and landlord debt,” Boyd said.
Front Street deals
The sale of the 3155 Maplewood property likely caps a busy 2022 for major real-estate deals by Front Street Capital.
In July, the commercial real-estate firm completed the $64 million sale of the 610,000-square-foot Union Cross Distribution Center, one of the largest speculative industrial buildings in the Triad.
The distribution and warehouse facility is on a 42.8-acre tract at 4501 Wallburg Road in Winston-Salem.
The facility was purchased by Union Cross GT LLC, a joint venture involving Galaxy Investments LLC and Halle Acquisitions of Silver Springs, Md.
The logistics facility has had The Ardagh Group as its tenant since April. The company has said it plans to have up to 40 employees at the facility.
In August, Front Street Capital affiliates sold for a combined $36.9 million two industrial properties in southeastern Forsyth to affiliates of Westcore, a San Diego industrial real-estate group making its entrance into the Triad.
The properties in Union Cross Industrial Center were: a 200,000-square-foot facility on 21.5 acres at 4991 Millennium Drive that sold for $21.6 million; and a 140,000-square-foot building on 11.17 acres at 4980 Millennium Drive that sold for $15.27 million.
Bunzl Distribution USA Inc. opened a $13.4 million plant at the 4991 Millennium site in 2019. The plant site has the capacity for adding 110,000 square feet of space.
Southern Carlson, a fastener and hooks manufacturer, is the tenant at 4980 Millennium.
“Westcore has been looking into North Carolina exposure for some time and was drawn to the opportunity,” said Matt McInnis with Front Street.
Front Street has been redeveloping what was once referred to as Building 23-1 in downtown Winston-Salem into Bailey South, along with the Morris Building, for nearly 100,000 square feet of office and retail space. That includes having space on the third floor.
The renovation costs have been estimated at being at least a $25 million capital investment.
An anchor tenant is The Variable with 21,500 square feet on the fifth and sixth floors. The group focuses on business innovation, marketing consulting and advertising services.
“We consider ourselves place-makers in that we have an opportunity to generate unique experiences for the public, for office tenants, for whatever it is to really create a dramatic sense of place,” Front Street partner Robin Team said.
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