Upstate New York MOB Portfolio Changes Hands

2 Palisades Drive

The Albany Medical Office Portfolio, a four-property, 119,602-square-foot portfolio located in the Capital Region of the New York State, has changed ownership. According to Albany and Rensselaer County records, the sellers were entities affiliated with Paulsen Development. A national healthcare real estate investment trust acquired the following assets:

• 2 Palisades Drive, Albany;

• 4 Palisades Drive, Albany;

• 5 Palisades Drive, Albany;

• 2 New Hampshire Ave., Troy.

Situated close to three St. Peter’s Health Partners hospitals, the portfolio was fully leased at the time of sale, with St. Peter’s Health Partners occupying 67 percent of the total office space. Other tenants include Albany Associates in Cardiology, NY Physical Therapy and Prime Care Administrative, among others.

Totaling some 94,400 square feet, the Albany properties are part of the Executive Woods Medical and Office Campus, according to CommercialEdge information. Located just north of Interstate 90, the campus also comprises 101,904 square feet across two other medical and general office buildings at 3 and 4 Atrium Drive. The two-story, Class B assets came online between 1989 and 2009.

The 25,200-square-foot Troy facility is the only Class A asset in the portfolio. Paulsen Development completed the two-story building in 2006 on a 1.2-acre site just north of Highway 7, CommercialEdge data shows.

Lisa Menin of Jacobson Properties and Leo Jones of Pyramid Brokerage Co. of Binghamton advised the seller in the disposition.

Still a magnet for investors

Medical office space continues to be a hot target for investors, as these assets have proven to be more resilient than other property types during the pandemic. PwC and the Urban Land Institute have shown, in a recent survey, that medical offices rank third in both development and investment prospects for commercial real estate in 2021, after fulfillment centers and warehouses.

The Albany Medical Office Portfolio sale is the largest of the eight transactions that have closed in the state since the beginning of 2021, according to CommercialEdge data. The largest single-asset deal involved a 74,112-square-foot property in New York City that LaSalle Investment Management acquired for $95 million in mid-July.