Colorado Real Estate Journal - February 18, 2015
A local, private investment group recently acquired a medical office portfolio in Colorado Springs, which included the Penrose Pavilion, for an undisclosed price. Colorado Springs MOB Investors LLC purchased the Penrose Pavilion building, the Union Medical Plaza (former Rocky Mountain Cancer building) and two development sites adjacent to the buildings from Westfield Medical Office Partners VIII LLLP. “The privately held investment group really saw it as an institutional-grade investment, well located on the Penrose campus with good tenants on long-term leases,” said Gary Hollenbeck of Palmer McAllister, who represented the buyer in the acquisition. Hollenbeck, who was involved when development started on Penrose Pavilion in 2011, will continue to be involved in leasing and management of the building for the new owners but declined to comment further on the transaction. Westfield Company Inc. developed Penrose Pavilion, a fourstory, 71,000-square-foot medical office building at 2312 N. Nevada Ave. on the Penrose Hospital campus and two miles north of the city’s central business district. Upon completion of the building, the partnership signed a lease with Rocky Mountain Cancer Center for the entire fourth floor (approximately 17,561 rentable sf) of Penrose Pavilion for 10 years. As a condition of the lease, the partnership purchased RMCC’s 23,956-sf facility at 3027 N. Circle Drive. The Penrose Pavilion building was around 92 percent occupied at the time of sale with the Union Medical building fully leased. The commercially zoned parcels are 8 and 3 acres in size, respectively. “The partnership planned to hold the properties long term, however, the opportunity presented by the investor group absolutely achieved the objectives for the properties, so the partnership decided to go ahead and sell,” added Randy Schwartz, partner, Westfield Company Inc.