September 9, 2019— Real Estate Development Associates, LLC (REDA), a Southern California-based opportunistic real estate investment and development firm, has announced the sale of Newport Heights Medical Center (NHMC). Built in 2017, NHMC consists of two class A buildings totaling 59,978 square feet. Building One, located at 20350 Birch Street, is 18,303 square feet and Building Two, located at 20360 Birch Street, is 41,675 square feet.
REDA sold the 100 percent occupied campus to LaSalle Investment Management. REDA was represented by Chris Bodnar, Anthony DeLorenzo and Ryan Lindsley of CBRE.
REDA acquired the four-acre site for NHMC in 2015 for $8.8 million. The firm proceeded to re-entitle the site for construction of two, two-story medical office buildings. “We saw strong potential in this location, due to great transportation access and the lack of new state-of-the-art medical office space in the immediate area. The site is surrounded by a number of hospitals and major medical centers but existing product was functionally obsolete,” said REDA Founder and Principal Jason Krotts. To that point, the surrounding area includes Hoag Hospital – Newport Beach, Fountain Valley Medical Center, Orange Coast Memorial and UC Irvine Medical Center.
In 2016, REDA initiated construction on a speculative basis and completed the buildings in 2017. The campus is now home to Starpoint Health Outpatient Surgery Center, UCI Health Newport, Eden Fertility Management, Newport Foot and Ankle, Grover Aesthetics and Lea Plastic Surgery. Bryan McKenney of Cypress West Partners handled NHMC leasing.
Krotts cites the strength of the team as to the overall success of the project. “This is now a trophy asset in Newport Beach with a high percentage of investment-grade tenants. It has been a positive catalyst for our firm to continue its investment and development of medical office, further complementing our successful industrial portfolio,” added Krotts.
The NHMC team included lender Bank of the West, investors Bascom Group and Westminster Funds, contractor Millie Severson, and property manager California Commercial.
Since its founding in 2009, REDA has primarily focused on industrial development throughout Southern California. The firm currently has close to 500 acres of development land in the Inland Empire in all phases from pre-entitlement to construction. The firm is now under construction on 2.5 million square feet of industrial space in Ontario and San Bernardino. REDA has invested almost $500 million of equity and controls development assets with approximately $1.7 billion in stabilized value.