The Laramar Group, a Denver-based national real estate investment and property management company, has acquired UC Health Orchards Medical Center at 221 E. 29th St. in Loveland, for its Laramar Medical Properties Fund I.
The 41,580-square-foot building is 100 percent leased to three investment-grade tenants, including UC Health, Colorado’s largest health system, which occupies 25,866 square feet, 62 percent of the building.
“This medical office asset offers tremendous long-term growth potential, given the demand drivers in the market and the property’s alignment with UC Health, Colorado’s dominant healthcare system,” said Ben Slad, senior vice president of investments. “The greater Denver market is an excellent medical office market that is experiencing strong population growth and demand for healthcare service to support community-based care.”
UC Health is building out 70 percent of its space to fit its specific needs and leaving the remainder for future growth, a sign of its commitment to the location. UC Health has 26,000+ employees, 12 hospitals, and more than 150 clinics and is ranked the #1 hospital in Colorado and the best employer in the state.
The building is located near 29th Street and Highway 287 and is adjacent to a fully leased retail center with local and national tenants. There is also a recently-built 155-unit apartment community for ages 55 and older nearby.
Loveland realized 17.7 percent population growth from 2010 to 2019, higher than state and national growth rates. The city is expected to grow by 7 percent over the next five years.
The building’s other tenants include:
- SummitStone Health Partners, the largest behavioral health provider of Medicaid in Larimer County, leases 11,288 SF for its behavioral health and substance abuse treatment and prevention services. SummitStone has 10 locations throughout northern Colorado.
- LifeStance/Heart Centered Counseling, is an outpatient behavioral healthcare company for children, adolescents and adults. The company leases 4,426 SF in this location and operates approximately 500 centers in 31 states.
The Laramar Medical Properties Fund I is focused on investing in targeted U.S. markets nationally to generate consistent distributable cash flow with risk-adjusted returns. Laramar closed on three assets for the fund in 2021 and projects to acquire 7-10 assets in total ranging in size from $10 million to $50 million. The fund is focused on multi-tenant assets with health system, credit or dominant regional tenancy, favorable WALT, diversified medical uses, and assets that offer opportunities to enhance value through increased occupancy and building improvements.
“Laramar is closely monitoring the demand-supply balance and growth dynamics in medical office markets around the country,” said Slad. “As demand for healthcare services continues to outpace supply, we expect medical office buildings to increase in value and continue to drive additional investment activity.”