A medical office building in Torrance, California, recently hit the market, offering investors an opportunity in the thriving healthcare real estate sector. Spanning 55,218 square feet, this three-story facility is currently 100 percent leased by credit tenant Optum, ensuring a stable income stream for the next 3.5 years.
The three-story building sits on a 2.7-acre lot at 3565 Del Amo Blvd. The concrete and steel office building was originally built for HealthCare Partners in 1987 and received a renovation in 2018, after health services company Optum acquired DaVita Medical Group, which owned HealthCare Partners, in 2017. Corion Properties is marketing the building on behalf of a private investor based in Rolling Hills Estates, Calif.
Today the building is 100 percent leased by credit tenant Optum under a quadruple net lease, which holds the tenant responsible for all property taxes, utilities, insurance costs, maintenance and structural repairs. The contract is in place for the next 3.5 years. The Class A building also comes with 312 surface parking spots.
The property houses a variety of healthcare specialty providers including family practice, internal medicine, pediatrics, endocrinology, rheumatology, dermatology, pulmonary, cardiology, and radiology, according to marketing materials from Corion Properties.
The medical building is situated in central Torrance near California State Route 107, which offers connections to Interstate 405, State Route 1 and State Route 91. Amenities like Del Amo Fashion Center and South Bay Galleria are less than a 10-minute drive from the property, and Redondo Beach Pier is a short drive to the west.
The property is just the latest in a string of high-profile medical office transactions across Los Angeles County over the last several months. The Registry reported in June that Santa Ana’s medical office real estate market was growing steadily, driven by a growing population, limited inventory and increasing demand for healthcare services. That same month, The Registry reported a 7,207-square-foot Class B office space in the Fashion Island shopping center was listed for $11.995 million, a price per square foot of $1,664. Kaiser Foundation Health Plan in January acquired a three-story, 223,900-square-foot medical office building in the Valencia neighborhood of Santa Clarita for $67 million, or approximately $300 per square foot. An entity linked to Global Net Lease sold the property at an approximately 30 percent discount compared to what it paid for the property in 2014, according to The Registry.
A Colliers report on healthcare-related real estate found that average net asking rents in the medical outpatient building sector reached an unprecedented high of $24.37-per-square-foot in 2023. That number exceeded $35-per-square-foot in Los Angeles. The same report found Los Angeles was the third leading market for medical office construction in 2023, behind Houston and New York.
