Tower Goes From Underperforming to Upgraded
October 20, 2016DALLAS—Velocis purchased the property in 2012 and invested $1.5 million in property renovations, with substantial upgrades made to all six floors of the building and the parking garage, which resulted in positioning for a recent sale.
DALLAS—Built in 1985, Magnolia Medical Tower is adjacent to Baylor All Saints Medical Center. This location offers access to Cook Children’s Medical Center, Texas Health Harris Methodist Hospital Fort Worth and Plaza Medical Center of Fort Worth, as well as medical offices in the surrounding downtown medical district.
Velocis, a private equity real estate manager, purchased the property in 2012, and invested $1.5 million in property renovations, with substantial upgrades made to all six floors of the building and the parking garage. Renovations included modernizing the building’s elevators and upgrading common areas, applying new corridor finishes, upgraded lobby areas and reconstructing restrooms, as well as signage, mechanical and lighting updates to improve energy performance.
“Velocis recognized that it was in need of substantial capital improvements and professional management,” said Jim Yoder, Velocis principal. “The significant upgrades we implemented took the building from class-C-minus to B-plus and helped increase the leasing velocity at the property.”
Velocis recently sold the 89,991-square-foot medical office building located in the heart of the Fort Worth Medical District. Ridgeline Magnolia MOB LP purchased the property for an undisclosed price. Ridgeline will build off the upgrades made by the prior owner and plans to make minor improvements.
CBRE’s Lee Asher and Chris Bodnar of the US Healthcare Capital Markets Group partnered with Austin Barrett in the Dallas/Fort Worth market to broker the sale on behalf of Velocis. The buyer was unrepresented.
“When Velocis acquired this asset, it was underperforming, but very well located in the heart of the Fort Worth medical district,” Yoder tells GlobeSt.com. “By investing in significant property upgrades, we were able to achieve rental rates at or above our acquisition underwriting. In addition, we were successful in our efforts to enhance the rent roll by leasing space to a broader offering of medical practices which improved tenants’ referral patterns, helping to ensure the financial stability of the asset going forward.
”Dallas-based Velocis has been active in real estate investment since 2011, purchasing 21 assets located in major markets in Texas, Colorado, Georgia, Florida, Arizona, Virginia and North Carolina. Velocis is led by a team of five principals who are responsible for the acquisition, asset management and disposition of assets. In addition to Yoder, principals are Fred Hamm, Mike Lewis, David Seifert and Paul Smith.
