BearRock Investments LLC
110 Cliff Medical Bldg
110 W Cliff Dr, Spokane, WA 99204
~ 3-5 year hold, Targeting 22% IRR
Active
Purchased the well-located 70,000 square foot lab / medical building with 33% vacancy and below market rents. The partnership is adjusting existing rents to market while leasing vacant medical office suites within the project.
Project Type | Source | Size | Acquisition Price | Sale Price |
|---|---|---|---|---|
Medical lab, medical office, medical clinic space | Industry relationships, on the market | 70,274 square feet | $5,850,000 | Not yet sold |
BearRock Investments acquired the 70,274-square-foot, fully improved medical laboratory and office building from Providence Health in July 2024. Situated on 3.08 acres directly across from Spokane’s central hospital district (anchored by Providence Sacred Heart Medical Center), the property serves the healthcare needs of the entire Inland Northwest region, including Eastern Washington, Northern Idaho, Western Montana, and Southern Alberta.
At acquisition, the building was 67% occupied: 57% leased to Labcorp (NYSE: LH), one of the nation’s largest publicly traded clinical laboratory companies and 10% leased back to Providence for continued lab operations.
We closed all-cash at $5,850,000 ($83 per square foot, including the land) and raised $6.9 million of equity, intentionally over-capitalizing the project to fund tenant improvements and comprehensive exterior upgrades.
Even with approximately 21,000 square feet of vacant space, the property currently cash-flows at more than a 7% annualized return. Upon full lease-up, projected cash-on-cash returns exceed 13%.
Immediately following closing, our team launched a targeted outreach campaign to medical and lab users throughout the region and have signed two new leases and generated strong leasing interest for the remaining space.
Our exit strategy is flexible: we intend to either sell the asset once stabilized at full occupancy or place conservative, long-term debt, enabling a substantial tax-efficient return of capital to investors while retaining attractive ongoing cash flow on the remaining equity.
