Real Estate - Commercial

Medical Real Estate Firm Invests In OrthoWilmington Properties

By Cece Nunn, posted Jun 24, 2016
A medical real estate firm has invested in OrthoWilmington properties, including the practice's facility at 3787 Shipyard Blvd. (Photo by Cece Nunn)
A firm that focuses on investing in medical real estate has closed a deal for two OrthoWilmington buildings in the Port City and plans to buy another currently under construction in Shallotte.

"We like to get the best of the best, the best operators, the best tenants who we believe are going to do extremely well over the next 10 to 15 years," said Chip Conk, CEO of Tennessee-based Montecito Medical Real Estate.  

In the leaseback transaction, OrthoWilmington doctors also re-invested in a new partnership with Montecito Medical, Conk said.

Although officials did not disclose the financial details of the closed and pending sales, deeds show the sale prices of two OrthoWilmington buildings in Wilmington totaled more than $25 million, nearly $12.9 million for the OrthoWilmington facility at 3787 Shipyard Blvd. and $12.3 million for the one at 2716 Ashton Drive.

Montecito Medical has a third property, an office that will be about 15,000 square feet when construction is finished, under contract.

OrthoWilmington CEO Stephen DeBiasi said he thinks of the transaction with Montecito Medical as a form of refinancing, and the large orthopedic practice, which has 23 doctors and at least 22 physician's assistants, will be staying in the same locations in Wilmington.

DeBiasi said OrthoWilmington, as part of the deal, has also retained control of maintenance for the Shipyard Boulevard and Ashton Drive buildings, continuing relationships with the same local vendors for tasks like landscaping, cleaning and other needs associated with the ongoing running of those facilities.

Mark Johnson and Janet Rose of Coldwell Banker Commercial SunCoast represented OrthoWilmington in the transaction with Montecito.

DeBiasi said in only a short amount of time after Johnson and Rose began marketing the buildings, the practice had multiple offers.

"So the market is hot for this type of transaction," he said.

DeBiasi said in general, physicians coming out of school with a lot of debt don't have the financing to buy into real estate and fewer are joining private practices. 

A third existing OrthoWilmington building in Porters Neck is for sale and listed by Johnson and Rose.

OrthoWilmington will consolidate its Sunset Beach and Supply offices into the Shallotte building, under way on U.S. 17, when the facility is complete, DeBiasi said.

OrthoWilmington merged with a Brunswick County practice, Orthopaedic Specialists, in January 2015 and continues to grow as the need for orthopedic services increases in the area.

"We see more than 1,000 patients a day," DeBiasi said.

Montecito Medical's presence in the area could also expand.

"We're very excited about this acquisition and look forward to having a very steady investment and would like to acquire more in the area over the next several years," Conk said. "That's typically what we do -- we got to a market, and we'll get to know the providers and get to know the market and hopefully there will be some follow-up acquisition."

Conk said in general his company's purchases can enable doctors to put capital back into their practices and hospitals. Montecito Medical specializes in acquiring medical office properties valued from $10 million to $150 million.

"There's lots of ways that they can get a better return on their investment than the real estate. We align with them, we do long-term leases, and it's worked really well for a lot of them," Conk said. 

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