Evernorth Care Group sells three-building Phoenix medical office portfolio for $12.8M

Evernorth Care Group has sold a three-building medical office portfolio across metro Phoenix for $12.8 million, splitting 98,500 square feet between two buyers in three transactions, Connect CRE reported. MCR Companies took the Glendale and Chandler properties in a 1031 exchange, while Empower College Prep bought the Phoenix building; CBRE's Geoffrey Turbow, Emily Minnier, Brian Butler and W. Glenn Dyke represented the seller.

Across the full 98,500 square feet, the price works out to roughly $130 a square foot, well under a Brea office building that cleared in a 30-day sale last month at $205 a foot with the vacancy included, in a different market — the sort of number two buyers with very different plans can both underwrite. The portfolio runs from an 18,600-square-foot single-story building on West Chandler Boulevard up to the 44,000-square-foot, two-story property on North 75th Avenue in Phoenix, the largest of the three, with a 35,000-square-foot two-story on West Eugie Avenue in Glendale in between.

The seller is Evernorth Care Group, identified in the coverage as the former Cigna Medical Group, a provider group selling the buildings where it practices. The story does not say whether Evernorth remains in the space as a tenant, and that answer separates a leased clinical building from vacant space near a hospital — the first question a buyer of provider real estate should be asking here.

Each of the three properties sits close to a flagship hospital: Banner Thunderbird Medical Center in Glendale, Banner Estrella Medical Center in Phoenix and Dignity Health Chandler Regional Medical Center in Chandler. PWD wrote in September that for medical office sellers, the real exit buyer for on-campus clinical product is often the health system next door, pointing to South Broward Hospital District's $69 million purchase of a 1980s Hollywood campus. This portfolio is the flip side of that pattern: the systems anchor the submarkets, neither is identified as a buyer, and the clearing price reflects an off-campus buyer base.

MCR's exchange explains half the bid: an exchange buyer is recycling proceeds rather than raising fresh equity, which suggests a deadline and a hold rather than a trade, and leased medical office is a familiar resting place for that money. Empower College Prep's purchase of the 44,000-square-foot Phoenix building is harder to read, because the coverage does not say whether the school intends to occupy the two-story building or convert it, nor what the $12.8 million breaks down to between the two buyers. Charter and school operators have become real bidders for suburban office product; what they pay per foot, and against what basis, will tell the market whether that demand is durable or opportunistic.