SAN DIEGO, Calif., June 2, 2021 – Cushman & Wakefield announced the firm has brokered the sale of the Pomerado Outpatient Pavilion in Poway (San Diego), California. The 160,000-square-foot medical office building is mostly occupied by Palomar Health and its associated medical groups and is adjacent to its Palomar Medical Center Poway hospital. Although the purchase price and terms of the transaction are confidential, the total transaction value was in excess of $100 million.
The Pomerado Outpatient Pavilion was acquired by a publicly-traded Real Estate Investment Trust (REIT). Travis Ives with Cushman & Wakefield’s Healthcare Capital Markets Team represented Palomar Health in the transaction helping them exercise and assign the purchase option in the ground lease, evaluate potential replacement buyers, select a replacement buyer, and negotiate the new master lease for the building.
“This transaction marks the culmination of a long-term strategy we devised with Diane Hansen, Palomar Health’s Chief Executive Officer, all the way back in 2016,” said Travis Ives, Managing Director. “Faced with a long-term lease at above market rents, Diane was seeking a solution to reduce rental obligation and gain access to much needed capital for tenant improvements. The new master lease is projected to save the healthcare system in excess of $2 million annually in addition to providing immediate access to capital for tenant improvements to expand services in the building.”
“We are very pleased at the successful outcome of this transaction and appreciative of the strategic guidance and advice received from Travis and the Cushman & Wakefield team throughout the process,” said Diane Hansen, Palomar Health’s Chief Executive Officer. “The savings achieved and access to fresh capital will support our commitment to delivering the best care to the communities we serve while being good stewards of the district’s assets. We’re looking forward to expanding our services at this location and enjoying a new partnership with an experienced owner of medical office buildings.”