The Inland Empire West acquisition closes below the original $17.95 million asking price as the joint venture pushes its medical office portfolio to 13 properties.
Cypress West Partners and TPG Angelo Gordon have closed on Chino Hills Professional Plaza, a 41,071-square-foot medical office building at 2140 Grand Ave., paying $17.2 million, or roughly $418.79 per square foot, according to the Kidder Mathews 1Q 2026 Inland Empire Office report. The seller was Korda Group, which had owned the two-story complex since at least the mid-2000s.
The price came in $750,000 below the $17.95 million the property was originally marketed at in September, when CBRE rolled out the offering at roughly $437 per square foot, The Registry reported at the time. Even at the trimmed figure, the deal stands as the largest office transaction recorded in the Inland Empire during the first quarter, edging out the $12 million sale of Corona Corporate Plaza II in the Inland Empire East submarket.
For the buyer, the acquisition is a continuation of a strategy that has accelerated sharply over the past year. Cypress West, a Rancho Santa Margarita-based healthcare real estate specialist, formed a programmatic joint venture with TPG Angelo Gordon in 2024 aimed at deploying up to $300 million into medical outpatient assets across high-growth Sunbelt and West Coast markets. The Chino Hills closing, announced alongside the simultaneous purchase of the 91,200-square-foot Pima Medical Pavilion in Scottsdale, brought the partnership’s portfolio to 13 properties, according to Commercial Property Executive in January.
The Chino Hills building checks several of the boxes Cypress West has consistently underwritten to. The property is 94 percent leased and anchored by Pomona Valley Hospital Medical Center, which has occupied space at the plaza since the building was constructed in 2004 and renewed last year on a seven-year term running through the end of 2029 with 2.5 percent annual escalators, according to CBRE’s marketing materials cited by The Registry in September. The hospital takes down nearly half the rentable square footage; the remaining space is parceled across 15 tenants, none of which controls more than six percent of the building.
CBRE’s offering brochure pegged the in-place capitalization rate at roughly 6.5 percent, rising to 7.8 percent by the fourth year of ownership. That trajectory aligns with broader pricing dynamics in the Inland Empire office market, where cap rates expanded to 7.2 percent in the first quarter from 6.9 percent at year-end, according to Kidder Mathews.
The pricing is also notable against a deteriorating broader market. The Inland Empire office market closed the quarter with an average sales price of $110.27 per square foot, a 31.65 percent decline from $161.32 a year earlier, according to the Kidder Mathews report. The Chino Hills transaction priced at nearly four times that regional average — a premium that reflects the gulf between commodity suburban office and stabilized, hospital-anchored medical outpatient product.
That gap is precisely the thesis Cypress West has been pressing. Medical outpatient buildings have outperformed traditional office over the past two years, insulated from the remote-work compression that has gutted urban towers and pressured suburban parks. National investment in medical outpatient buildings climbed 27 percent in the third quarter of last year to $2.7 billion, with average asking rents hitting a record $25.20 per square foot, according to a CBRE report cited in Commercial Property Executive’s January coverage of the Cypress West acquisitions.
The Chino Hills purchase plugs into a financing structure Cypress West and TPG Angelo Gordon assembled in August 2024, when the partners closed a portfolio credit facility with Capital One Bank that included capacity for future acquisitions. The platform’s broader portfolio now spans California, Arizona, Nevada and Texas, with recent additions including the 68,000-square-foot La Cholla Medical Plaza in Tucson, MacFarlane Medical Center in Las Vegas and a 37,000-square-foot outpatient building in Chula Vista, according to CB Insights.
Local market conditions reinforce the bet. The Inland Empire medical office sub-segment spans roughly 8.4 million square feet across 148 properties and remained tight through mid-2025, with vacancy running at 4.4 percent and positive net absorption over the trailing year, according to CBRE data cited by The Registry. Within five miles of the Chino Hills property, only a handful of comparable buildings exist, and no new medical office construction is currently underway, the publication reported.
The broader Inland Empire office market told a different story in the first quarter. Vacancy compressed to 4.9 percent from 5.4 percent a year earlier and average asking rents nudged up 1.47 percent to $2.07 per square foot, but net absorption slowed to just 16,081 square feet, well off the 251,045 square feet posted in the first quarter of 2025, according to Kidder Mathews. Under-construction inventory dropped 34.47 percent year-over-year to 154,954 square feet, with the deliveries pipeline tilted heavily toward medical product — including the 67,497-square-foot RUHS Wellness Village in the Inland Empire East and the 32,292-square-foot Makena Medical Rancho Springs project, both slated for delivery this summer.
For Cypress West, the calculus is straightforward. The firm has focused exclusively on medical office since its 2013 founding, citing the sector’s durability against traditional commercial real estate cycles. With the Chino Hills closing, the joint venture has signaled it intends to keep deploying — and that the Inland Empire, despite its broader office headwinds, remains squarely in the crosshairs.
