TUCSON, AZ (December 21, 2023) – Sale leasebacks are growing in popularity as they represent benefits to both the seller-tenant and buyer-landlord. However, in today’s post-pandemic real estate market, where many properties remain in high demand and financing costs are rising, the popularity of sale-leaseback transactions is emerging as an attractive vehicle for owners and investors of real estate as a mechanism for tapping into a readily available source of capital. Compared to other commercial real estate and stock market investments, a properly structured sale-leaseback transaction can be a more attractive investment vehicle for sellers and buyers.
Banner Health has been using sale-leasebacks for their properties in Tucson, and several Banner medical offices recently sold in sale-leasebacks:
An investor in Salt Lake City, UT, Roy S Lulow Investment Company, bought 2167 West Orange Grove in Tucson for $1.846 million ($309 PSF). The seller is a medical group, Banner University Medical Group Cholla Pediatrics, that will continue to occupy the medical office with a leaseback agreement. John Yarborough and David Carroll with Romano Real Estate handled the transaction for buyer and seller, that closed on December 8, 2023.
In a separate portfolio sale, Banner Health – UMC sold three medical office facilities in sale-leasebacks to New York-based The VanBarton Group, a privately owned, vertically integrated real estate investment manager. With a 30-year track record investing in customized real estate strategies for large, sophisticated institutional investors, the Banner portfolio was acquired for $19.5 million.
The three properties in the portfolio included:
- University of Arizona Cancer Center at 1881 -1891 West Orange Grove sold for $10 million ($343 PSF)
- Banner Multispecialty Clinic at 265 West Ina Road sold for $7.1 million ($324 PSF)
- Banner Multispecialty Clinic at 7901 E 22nd Street sold for $2.4 million ($290 PSF)
The buyer, The VanBarton Group and seller, Banner Health for all. The sale prices were recorded on December 13, 2023.
For more information, Yarborough and Carroll should be reached at 520.577.1000.
To learn more, see RED Comps #11019, #11030, #11031, and #11032.