IRA Capital Acquires Thatcher Medical Center in Pasadena for $21.6M
IRA Capital announced today that it has completed the acquisition of Thatcher Medical Center, a 73,564 square-foot, two-building medical office complex in the heart of Pasadena, CA. The asset is viewed by the local population as an “iconic” property originally designed and constructed to be the premier medical office building in the City.
Thatcher Medical Center is situated in a high barriers to entry, in-fill location and is 1.5 miles from the pre-eminent local hospital. There are numerous demand drivers, including over 1,300 office buildings within a five-mile radius. Pasadena’s demographic trends demonstrate a growing segment of an aging and affluent local population, further validating the need for the facility and its strong position in the market. This is further evidenced by the fact that 44% of the tenant base has occupied the property for an average of 19 years. IRA Capital negotiated a purchase price of $21,625,000, which represents a 7.77% cap rate based on the 80% in-place occupancy. IRA Capital’s acquisition price is approximately $7 million less than that of the existing owner. In addition to upside available through an aggressive lease-up strategy, IRA Capital intends to enhance value by re-entitling the surface parking lots to allow high-density residential use. IRA Capital has a significant understanding of the asset and will be participating in the project equity alongside the equity investor, and will be acting as the operating partner with control over certain operating decisions.