The Bridgewater Medical Building at 1125 Route 22 in Bridgewater — Courtesy: Atkins Cos.
By Joshua Burd
A joint venture has sold a repositioned, 95,000-square-foot medical office building in Bridgewater after securing a lease with one of the state’s largest health care networks.
The partnership, which includes Atkins Cos. and Capital Solutions, completed the sale of its Bridgewater Medical Building after acquiring it in spring 2017. The property at 1125 Route 22 is currently leased to Atlantic Health System and MidJersey Health Corp., a joint venture of Hunterdon Healthcare and Atlantic that operates in an adjacent space.
Newmark Executive Managing Director Ben Appel, Senior Managing Director Jay Miele and managing directors John Nero and Michael Greeley brokered the sale to Anchor Health Properties and the Carlyle Group. Terms were not disclosed.
“We continue to see tremendous unmet demand from growing health care networks like Atlantic Health System and Hunterdon Healthcare for Class A medical office space in the northern and central New Jersey markets,” said Cory Atkins, vice president and director of acquisitions of Atkins Cos. “In a market where ground-up development can often be difficult, we knew that this property presented an ideal opportunity to create one of the finest medical office properties in the region.
“This sale highlights our success in bringing our vision to life and we are deeply proud of the work we have done to create a space that will allow these health care systems to expand their services into our local community for years to come.”
Atkins announced the sale Wednesday while recounting its value-add strategy for the building, a former regional headquarters for Bank of America. The property was fully leased to the lender and to MidJersey Health at the time of its 2017 acquisition, but the lender was set to vacate its 37,030-square-foot space at the expiration of its lease.
Soon thereafter, Atkins began negotiations with Atlantic Health System to lease the bank’s former space, culminating in a commitment in late 2019, according to a news release. Simultaneously, Atlantic Health and Hunterdon expanded their relationship at the property through a joint venture partnership in the four-room ambulatory surgery center, imaging center and physical therapy located on the western side of the building.
Atkins and Capital Solutions then began a major renovation to convert the former Bank of America suite to a space more suited for Atlantic Health System. Upgrades included closing in the existing drive-through underpass to integrate the structure, exterior site improvements such as constructing two new entrances with canopies and drive-up and drop-off areas and a total interior renovation to create modern medical suites.
“Following the repositioning of the property by Atkins and Capital Solutions, ownership built upon the existing lease with Hunterdon Healthcare to sign a new long-term lease to Atlantic Health System,” Appel said. “Through their commitment to the building, the health systems provide aligned and coordinated care across numerous specialties and subspecialties, including a full-floor ambulatory surgery center and full-floor imaging center. This tenant make-up attracted capital profiles both public and private, domestic and abroad.”
Upon completion, Atlantic Health plans to house various subspecialty practices such as orthopedics, oncology and OBGYN, the news release said. Completion of Atlantic Health’s entire build-out and full occupancy is slated for the first quarter of 2021.
“It was a seamless, efficient process working with Atkins Companies and Capital Solutions. They were upfront and transparent throughout the duration of the transaction,” said James Schmid, chief investment officer and managing partner with Anchor Health Properties. “The company’s deal experience also showed as they were able to effectively and quickly find solutions to items that other sellers may have not been able to.”
