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Israeli Investor Hearts B'more

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Israeli Investor  Hearts B'more
Tel Aviv-based Gazit-Blobe subsidiary ProMed Properties has acquired a 79k SF condo within the Johnston Professional Building on the MedStar Union Memorial Hospital campus (where our DC reporter and his twin sister were born) for $21.8M. Herein lies a little lesson in on- vs. off-market dealmaking.
Jay Wellschlager, August 2012
Cassidy Turley's Jay Wellschlager (whom we snapped at ourBisnow Healthcare Real Estate Summit) tells us ProMed—the healthcare subsidiary of Gazit-Globe, which also runs Equity One REIT and others—wasn't the initial interested buyer. It all started when an unsolicited offer came in from another party, and the owner asked Jay and friends to run an investment sales auction. ProMed's higher-than-the-original bid is an example of why it's a good idea to take properties to market, Jay says. "You never know where the market will land."

Johnston Professional Building, 3333 N Calvert St
The property at 3333 N Calvert St is just a block from Johns Hopkins.Here's how Jay and colleagues Jon Carpenter and Doug Brinkley assembled the year-in-the-making transaction: MedStar Union owns the first four floors, and a partnership (50% hospital, 50% physicians) owned the air rights leasehold for the upper four floors. (A bunch of birds tried to create a REIT to buy the air rights, but their paperwork was a mess.) Each of those entities was leasing space back from the partnership. ProMed bought the air rights leasehold(which now has been extended) and now leases directly to each tenant. So the deal involved 13 lease amendments, including TIs and rent modifications.