The property, which sold through bankruptcy court, was acquired by a local investment group for approximately $20 million. The seller was Astria Health, which filed for Chapter 11 bankruptcy in 2019. Both properties were mostly vacant at the time of sale aside from an ambulatory surgical center in the medical office building that Astria Health will continue to operate under a leaseback agreement with the buyer.
“Healthcare real estate remains in very high demand from investors across the country, but most of that demand is for stabilized medical office buildings in a top 100 MSA. This particular assignment presented a unique challenge in marketing a mostly vacant medical office building along with a large, recently vacated general acute care hospital located in a rural Central Washington community,” said Travis Ives, Managing Director and co-leader of the firm’s national Healthcare Capital Markets Team.
Ives continued, “Oftentimes vacant hospitals in rural locations fail to attract capital with the vision to repurpose them and the intent to maintain some element of healthcare services for the local community. We were pleased with the outcome on this assignment because it resulted in a win-win-win scenario. Astria Health achieved a very competitive price for the property, the buyer acquired a unique asset that met their needs perfectly and the local community will benefit from a revamped medical campus that will continue to provide much needed healthcare services to area residents.”
The hospital formerly known as Astria Regional Medical Center is located at 110 S 9th Ave. Totaling nearly 290,000 square feet, the property consists of six floors, plus basement, of built-out inpatient hospital space. The former license provided for up to 214 beds, however alternative uses or configurations of the building may allow for a larger bed capacity. The hospital was originally constructed in the early 1960s but underwent a significant renovation in 2010.
Ives noted, “The hospital closed in 2019 and the license has since been terminated, however the existing improvements and underlying entitlements provide an attractive opportunity for a variety of alternative healthcare uses.”
The neighboring medical office building known as Astria Regional Medical Plaza is located at 1005 Walnut St and features 80,042 square feet of built-out medical office space including the ambulatory surgery center on the 2nd floor that Astria Health will continue to operate. The buyer intends to backfill the remainder of the building with various medical practices from the area. In addition to grade level parking, the building also features secured, subterranean parking as well as a roof-mounted helipad. The building was originally developed in the mid 1990s and has undergone various renovations since that time.
Situated southeast of Mt Rainier National Park, Yakima is the largest city in Yakima County with a population of about 94,000. The city is located along Interstate 82, approximately 140 miles southeast of Seattle, 200 miles southwest of Spokane, and 185 miles northeast of Portland.
Cushman & Wakefield’s Healthcare Capital Markets Team is comprised of Travis Ives, Gino Lollio and Scott Neidergang. With this transaction, the team has collectively closed 5.7 milion square feet of healthcare real estate valued at over $1.5 billion. The team collaborated on this assignment with Mark Carnese and Matt Johnson of Cushman & Wakefield’s Portland office as well as Bill Almon, Jr. of Almon Commercial Real Estate in Yakima.