Woodside Health has paid $20.9 million for Paradise Valley Plaza, a three-building, multi-tenant office and medical complex spanning 100,203 square feet in Scottsdale, Ariz., a Phoenix submarket. Cloud Peak Development LLC sold the asset in a deal brokered by Cushman & Wakefield.
The asset previously traded in September 2020, when Cloud Peak acquired it from Fenway Capital Advisors for $16.7 million—about $172.6 per square foot—according to CommercialEdge information.
The Class B campus came online in two phases in 1985 and 2000 and underwent cosmetic renovations in 2014. Its two-story buildings have floorplates of 30,000 square feet, CommercialEdge shows. Amenities include interior and outdoor courtyards, exterior loading suites and about 388 parking spaces.
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The property was 95 percent leased at the time of sale, with the tenant roster including office and medical/wellness companies such as HonorHealth, Next Level Physical Therapy and Forma Plastic Surgery.
Located at 5010, 5020 and 5040 E. Shea Blvd., the 6-acre complex is some 15 miles from downtown Phoenix and 14 miles from the Phoenix Sky Harbor International Airport. Medical providers in the surrounding area include Mountain View Medical Center, HonorHealth Medical Group and Dickerson Orthodontics.
Cushman & Wakefield’s Private Capital Markets Executive Managing Directors Eric Wichterman and Chris Toci, along with Managing Director Mike Coover, represented the seller.
MOB sector in the spotlight, despite some challenges
With an ever larger aging population driving demand, the U.S. medical office real estate market is projected to see further expansion in the coming years. Investors expect capital market activity to pick up as interest rates fall and the bid/ask spread narrows. However, the sector also faces challenges, such as a national shortage of medical specialists, which may impact growth despite the generally positive outlook.
Phoenix registered 31 medical office building sales over $1 million in the third quarter of this year, according to a CBRE report. Out of them, more than a quarter were part of portfolio transactions. Assets traded for $328.2 per square foot on average.
In October, Meridian purchased a 94,569-square-foot medical office building in Tucson, Ariz., from an affiliate of Tenet Health. The property will undergo a capex program slated for completion in early 2026 and will be fully occupied by El Rio Health.