Due to the ever-growing need for medical facilities, investors continue to show interest in Los Angeles’ medical office assets. In a recent transaction, a newly converted medical office building in Encino was sold for $12.9 million, or approximately $267 per square foot, a recent San Fernando Valley third quarter submarket report from CBRE showed.
According to public records, the property, located at 17835 Ventura Boulevard, was sold by Los Angeles-based Elat Properties Investments and Development. The buyer was Encino Towers LLC, an entity associated with Kaysan Ghasseminejad, which also shares an address with California Community Hospice Care.
The property totals 48,590 square feet and is situated on 1.2 acres of land. Built in 1972, a recent marketing brochure from Marcus & Millichap shows the property was recently renovated with 68 percent to be used for medical office space. Renovations also included an upgraded lobby and corridors and secured parking.
Additionally, the marketing brochure showed that the property is 81 percent occupied, with 93 percent of leases expected to expire in 2022.
The property is located near various restaurants, retailers and hotel assets. It is also in close proximity to Interstate 101, providing easy access throughout the San Fernando Valley and into Downtown Los Angeles.
The report from CBRE showed that properties that were the most sought after in the third quarter of 2021 were medical office and lab facilities due to the consistent consumer demand in the healthcare industry. In addition to the sale of the property in Encino, other life sciences and healthcare transactions taking place in the third quarter of 2021 included Oxford Properties’ $134 million acquisition of the 14-building Innovation Park in Santa Clarita. Immpact Bio also signed a 26,286 square-foot lease at 8501 Fallbrook, a property located in San Fernando Valley’s West Hills neighborhood.
However, with the rest of the office market still facing difficulties amid the COVID-19 pandemic, CBRE reported a high vacancy report for the San Fernando Valley submarket overall. According to the report, the vacancy rate in the San Fernando Valley during the third quarter of the year reached 14.6 percent. At the same time, the region reported a negative net absorption rate of 75,802 square feet.
