Exchange Buyer's $1M Picks Off Two-Year Listing

PHOENIX-After nearly two years on the market, Los Olivos Healthcare Center has sold to a 1031 exchange buyer from Los Angeles for $1.1 million.

Steven Zipp acquired the 62,598-sf facility at 1314 E. McDowell Rd., from Sierra Land Co. of Glendale, CA. Built in the late 1960s, the facility housed a nursing home for nearly 35 years until the Dallas-based Tenet Healthcare Corp. expired in summer 2003. The facility has been dark ever since, says Tim Rios, an investment associate in Phoenix for Marcus & Millichap Real Estate Investment Brokerage Co.

Rios tells GlobeSt.com that the facility’s 1:1,000 parking ratio made it less attractive because it’s insufficient for most uses. He says most prospective buyers wanted to use the building as a nursing home, drug and alcohol rehabilitation center or charter elementary school. “Those three uses require the least amount of parking,” he explains.

Los Olivos Healthcare Center eventually received five offers–all lower than the $2-million list. However, Rios says money wasn’t the only concern for Sierra Land. “They wanted to make sure that the buyer could actually close,” he says.

When a nursing facility goes dark, it must meet new codes to reopen. “The complexity was finding a buyer with the means and the resources to go through re-licensing with the state,” says Rios, who teamed with Bernie Bajoras, also in the brokerage house’s Phoenix office.

According to Rios, Zipp is an experienced owner and operator of nursing homes. “At this point, his plan is to rehab the facility and run it himself,” Rios says, estimating the new owner will need to spend $1 million to $1.25 million on renovations.