HPA Exchange Acquires Dignity Health Micro-Hospital in Phoenix
HPA Exchange LLC, a healthcare real estate investment sponsor focused on securitized 1031 exchanges for accredited investors, announced the acquisition of a micro-hospital with an emergency room and imaging center that is 100% leased to Dignity Health in Phoenix.
HPA Exchange, which launched in May 2024, acquired the 3.92-acre property for approximately $30.3 million.
“We are thrilled to announce the acquisition of this well-located healthcare property that is leased on a long-term, absolute net-lease basis to an investment-grade tenant,” said Robert Lee, co-president and chief investment officer of HPA Exchange.
“HPA Exchange was founded earlier this year with the goal of targeting mission-critical healthcare real estate within growth markets that exhibit strong fundamentals, stable health system environments, and a growing aging population. Additionally, we seek out institutional-quality properties that are operated by best-in-class healthcare systems and physician groups, and this acquisition is a strong testament to the execution of our investment strategy,” said Lee.
The property was built-to-suit and completed in 2014 for Arizona General, a wholly owned subsidiary of Dignity Health. It is located in the 7100 block of South 51st Drive.
A multistate nonprofit network, Dignity Health is a part of CommonSpirit Health, a nonprofit health system with more than 2,200 care sites in 24 states, 35,000 providers, and 45,000 nurses. The health system has an upgraded Moody’s credit rating of A3 as of March 2024 and reported revenues of $34.6 billion in its fiscal year 2023. Dignity Health has more than 10,000 physicians, 400 care centers, and a reported $10.8 billion 2023 annual revenue. As a part of CommonSpirit Health, Dignity Health is the largest Catholic health system in the nation, according to rankings from Becker’s Hospital Review.
“This micro-hospital is an excellent example of how non-high-acuity healthcare is transitioning from large acute care environments like hospitals to well-located and well-designed strategic ambulatory care that is closer to resident neighborhoods,” added Thuy Turner, co-president and chief operating officer of HPA Exchange. “These facilities are designed to service the community for better access and efficiency.”
The acute care micro-hospital is located in Phoenix’s Laveen Village, approximately eight miles southwest of downtown. Including 38,900 rentable square feet, the hospital includes: a 24/7 emergency department; 16 patient beds; 10 emergency room beds; two advanced operating suites for surgical procedures; a full onsite laboratory; a full radiology suite with 64-slide CT scan, X-ray, and ultrasound capabilities; a pharmacy; and a cafeteria. The hospital’s lease is guaranteed by Dignity Health.
According to Jones Lang LaSalle’s report, Medical Outpatient Building Perspective, released in April 2024, medical outpatient buildings have seen relentless demand and remain one of the most resilient commercial real estate property types.
Healthcare Property Advisors is a vertically integrated institutional real estate fund manager, owner, operator and developer. It launched HPA Exchange to provide accredited investors with private placement opportunities anchored by medical properties. Initially focused on section 1031 exchange offerings, HPA Exchange seeks to offer investment-grade core and core-plus institutional-quality properties that are operated by best-in-class healthcare systems, established physician groups and life science groups for outpatient purpose-built facilities. The investment firm is led by a seasoned management team with an average of 25 years of experience in healthcare real estate.
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