JLL Capital Markets arranged senior financing for MDH Partners’ acquisition of the portfolio located throughout the Sunbelt

PHOENIX, ARIZONA – JLL Capital Markets announced today that it has arranged $84.3 million in post-acquisition financing for a six-property industrial portfolio totaling 1.58 million square feet throughout the Sunbelt with assets located in Miami, Florida; Atlanta, Georgia; Greensboro, North Carolina; Memphis, Tennessee; and Phoenix, Arizona, markets.

JLL worked on behalf of the borrower, MDH Partners, to place the five-year, floating-rate loan with Wells Fargo Bank, N.A.

The borrower acquired the portfolio properties in separate transactions throughout the year. The portfolio comprises two Florida properties, 1350 NW 74th St. in Miami and 3115-3165 Lakewood Ranch Blvd. in Bradenton, along with 5300 Kennedy Rd. in Forest Park (Atlanta MSA); 404, 420 A&B N. Chimney Rd. in Greensboro; 4565 W. Watkins St. in Phoenix; and 3527-3539, 3543 Lamar Ave. in Memphis. The well diversified portfolio is home to more than 30 local, regional and national tenants and located within high-performing industrial markets with robust tenant demand, demonstrated by limited vacancy rates and substantial 12-month net absorption.

The JLL Capital Markets Debt Placement team representing the borrower was led by Senior Managing Director Christopher Drew, Director Maxx Carney and Associate Reid Carleton, along with Senior Managing Director Ed Coco and Director Carl Beardsley.

“The portfolio received significant lender interest, which is a testament to exceptional strength of the sponsorship and the markets’ demand for industrial financing opportunities,” Drew said. “We are honored to have advised MDH Partners on this transaction.”

“The capitalization of this portfolio is a prime example of how industrial assets and exceptional borrowers continue to command superior interest from debt capital providers in a fragmented capital markets environment,” Carney added.

MDH Partner’s CFO, Arun Singh said, “This new portfolio enhances MDH’s platform with great tenant diversity, long leases and expanding MDH’s reach to Central Florida. We are delighted with JLL’s financing execution, especially given uncertain market conditions. We wanted to evaluate multiple loan structures and were impressed with the final outcome.”

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sale advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.

TUCSON, Ariz. — The University of Arizona Center for Innovation (UACI) is pleased to announce the UACI Sponsored Launch Fueled by R&A CPAs competition. The winning technology-based startup company will receive a sponsored year’s admission into UACI. Included with entrance into the program and space at UACI, the startup will also be awarded complimentary accounting service hours which brings the total prize package value to $15,000.

The University of Arizona Center for Innovation (UACI) has teamed up with R&A CPAs to sponsor one promising startup team with resources, facilities, services and expert guidance to grow their businesses. The twelve-month program will also foster networking opportunities for its participants.

The UACI program will offer customized business support to ensure the winning startup team has a successful launch. Through a structured business development program, the incubator helps entrepreneurs develop a business plan, identify target markets, refine their prototype, prepare a pitch presentation, secure investment and successfully launch into the market. UACI provides dedicated space for startups where they can work alongside other entrepreneurs where emerging companies and technology giants work side by side. 

“R&A CPAs is very excited to support UACI and a promising start up with our sponsorship,” said Phillip Dalrymple, CPA, CFE and R&A CPAs Shareholder. “We believe in the power of community and affecting positive change in Southern Arizona. We are proud to help further the great work UACI is doing and to provide the best opportunity possible for a startup business to succeed.” 

Application submissions opened on November 9 and close on December 2. After a review and interview process, the winning team will be announced on December 18. The team will then participate in the incubator program for one full year.

For this competition, UACI is seeking a second stage startup (beyond initial idea and single founder) in the technology sector with preference for a startup that has entered the product development phase, the pursuit of a scalable business model, a minimum full-time two-person team with a commitment to commercializing their innovation, a demonstrated need for incubation services and a desire to make a significant difference in the local and global community through innovation. The winning startup team will be immersed in the UACI incubation program supported by R&A CPA’s generous sponsorship contribution.

For more information and to apply, visit the website here.

Third Quarter Performance in Medical Space Market Remains Healthy During Pandemic

Phoenix,  Arizona – The Greater Phoenix Medical Office market has remained healthy during third quarter, despite an increase in sublease availability.  During the past three months, the market posted positive net absorption and a slight increase in rental rates, as well as maintaining vacancy below 15 percent.  Continued population growth is expected to drive demand for healthcare and medical office space.

Approximately 87,913 square feet of positive net absorption took place during third quarter, marking the third consecutive quarter of positive net absorption this year.  The Glendale submarket drove net absorption for the second consecutive quarter.  That submarket’s delivery and move-in of akos at akos Medical Campus Phase I led the overall market in the third quarter.

Vacancy rose 30 basis points over-the quarter to finish September at 13.7 percent.  Vacancy in medical office space has risen 100 basis points year-over-year.  Sublease space increased 17 percent over-the-quarter and now accounts for 1.3 percent of the entire medical office inventory.

Rental rates increased 1.4 percent over-the-quarter and 3.8 percent year-over-year, finishing September at $21.90 per square foot.  Rental rates have increased 19 of the past 20 quarters.  Central Scottsdale posted the largest rental rate increase year-over-year, increasing 10.1 percent to $26.59 per square foot.

The Medical Office market added 106,000 square feet of new properties during third quarter, which averaged 47 percent vacancy.  These new building are primarily located in the Glendale and Deer Valley submarkets. Approximately 56 percent of projects under construction are pre-leased, which will bode well for the vacancy rate to remain healthy with these additions.  Speculative development will be paused for a few months because developers are cautiously awaiting return of workers to offices for many tenants.

Investment sales volume increased dramatically 250 percent during third quarter but has decreased 15 percent over-the-year to $40 million.  The largest deal of the quarter was the $27 million sale of Scottsdale Gateway I.  The median price paid for medical office buildings increased 152 percent during third quarter to $160 per square foot. That price is below the five-year average of $189 per square foot.  Cap rates remained low at less than eight percent. Medical Office Condo sales favored investors during third quarter.  Sales volume increased 67 percent year-over-year and 29 percent over-the-quarter to $15,945,314.  The median price per square foot for Medical Office Condos finished the quarter at $233, which is a 9.4 percent increase year-over-year.  Approximately 61 percent of Medical Office Condo sales took place in the Scottsdale and Southeast Valley submarkets.

While leasing activity slowed during third quarter, it is expected to improve again to close the year and for the first portion of 2021.  As population is anticipated to increase 1.5 percent annually, Phoenix has become a priority market. The Medical Office market will thrive as the population grows, motivating more development, leasing and investment sales.

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