Realtech, one of the largest owners of commercial real estate in west Los Angeles, has leased its vacant Century City Hospital site to a consortium of medical-care providers including Select Medical, UCLA Health System and Cedars-Sinai Medical Center in a transaction valued at $80 million, Colliers International has announced. Term of the lease runs until 2030.
Built in 1971 and long operated by Tenet Healthcare, and most recently as a physician-run hospital, the nine-story structure at 2070 Century Park East, is part of Realtech’s Century City Medical Plaza, which is comprised of two buildings at the intersection of Olympic Boulevard. Colliers International represented Realtech in the transaction.
“Since the recession hit in 2008 and the last hospital operator was forced to close its doors, we have worked closely with Realtech to find a suitable tenant,” said Colliers Vice President John Wadsworth, national director of the firm’s Health Care Properties Division. “With an improving economy, healthcare reform underway as the result the Affordable Care Act (ACA), and new delivery models in healthcare, the timing was perfect for this facility to be leased and re-purposed to an acute- rehab facility.”
Although UCLA and Cedars-Sinai both are among the world’s elite teaching and medical research institutions, they are being joined in the consortium by Select Medical, a publicly traded company based in Pennsylvania that operates 15 similar hospitals around the nation, as well as some 100 long-term acute-care hospitals and approximately 1,000 outpatient clinics. It will manage the facility for UCLA and Cedars-Sinai, providing oversight of medical personnel staffing to operation of the physical plant, Wadsworth added.
“To strike this deal, formidable competitors – UCLA and Cedars -- were brought together through a series of negotiations that resulted in a substantial investment on our part in terms of upgrading the property to meet their needs,” said David Wilstein, founder and owner of Realtech. “Were it not for these generous allowances and concessions made by all involved in this deal, the transaction would not have happened.”
According to Colliers’ Wadsworth, plans call for work on the hospital to commence immediately with a target re-opening date of 2015. The new Century City Hospital will be utilized to alleviate the shortage of acute-rehab beds for patients.
“This new facility will provide a less costly option for patients who still need to recover after being treated in a hospital,” said Wadsworth. “The requirement for hospitals under the ACA is to move patients out of the more costly general acute hospital setting and into a more efficient and less expensive facility, ultimately lowering the cost of care and improving outcomes.”
The property itself totals 170,000 square feet and is located on a portion of a 1.86-acre site that also is the location of an adjacent 200,000 SF medical office building. Since the former Doctor’s Hospital closed its doors five years ago, the site has been used by a variety of Hollywood studios for shooting medical scenes for television series and feature films.