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Originally Posted by Obadno
Chelsea, There is an article in the Biz journal about the sale of an office building in midtown at 40 Indianola ave. Can you post the article in here so I can read it?
I want to know what the plan is for the building.
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Sure, here you go!
A Phoenix hospital building that has been sitting vacant for the past several years has been sold for $14 million — after the seller had bought it for $8.45 million three years ago.
Two entities tracing to Cindy Brown, a nurse practitioner with Phoenix-based CareLock LLC, bought the property from Indianola Acquisition LLC, led by managing partner Dan Brandt.
"They have a business that does treatment for people who are addicts," Brandt said.
The 73,196-square-foot structure sitting on 1.88 acres of land south of the southeast corner of Central Avenue and Indian School Road was built in 1982, according to Tempe-based Vizzda.
Pinnacle Bank provided a $10.5 million loan for the acquisition of the property at 40 E. Indianola Ave., according to Vizzda.
The building had housed Louisville, Kentucky-based Vencor Inc.'s specialty hospital for ventilator patients back in the 1990s. Vencor changed its name to Kindred Healthcare after emerging from a Chapter 11 reorganization in 2001.
The seller sold the property directly to the buyer, said Tim Dulany, senior vice president and associate broker for Kidder Matthews.
Previous deals fell through
Dulany had previously marketed the property, but all the deals fell through for one reason or another.
He got involved in marketing the property back in 2016 — three owners ago. Curahealth Property LLC, via its capital partner Ventas Realty, sold the property to a Phoenix-based investment firm called Glasir Capital Partners in August 2016 for $5.05 million, Dulany said.
"I marketed it all the way through 2021 and was in escrow with several buyers," Dulany said. "One was a heart surgeon who was going to buy it for a surgery hospital, but he couldn't get his financing during Covid. Another group was going to open a long-term care facility. They had problems getting debt financing as well."
Other groups from out of state also tried to buy the building, he said.
"They had respectful offers," he said. "Every time we took two steps forward, there were other challenges: pipes leaking in the building, copper thieves breaking into the building stealing computers, you name it."
Dulany showed the property more than 45 times over the years.
While the sale of the building included equipment, much of the expensive equipment like X-ray machines and beds were sold off to a wholesaler over time, he said.
Before Brandt bought the building about three years ago, the previous owners had rezoned the property, expanding the use to include senior housing, long-term dependent care, drug rehabilitation and even an immigration holding facility for adolescents.
"I put it under contract with an organization that housed refugee kids," Brandt said. "But it was controversial. Everybody hated me. To house immigrant kids is a heated subject. They're making you out to be a guy who is building cages to store kids in. It was going to be a nice facility with cool amenities for the kids."
Either way, that group lost its funding and wasn't able to seal the deal, he said.
Brandt and his investors bought the building about three years ago, paying $8.45 million, said Julie Johnson, executive vice president of Colliers International in Arizona.
Selling it for $14 million represents a 65% increase, showing the continued strength of the health care market in metro Phoenix.
"Its R-5 zoning allows for many different health care uses — behavioral health care, residential health care, senior housing, skilled nursing, and others," Johnson said. "The growth in inpatient behavioral health facilities has been significant in the past 10 years, and with the pandemic it has not only grown in public awareness but also with increased availability for such treatment."