Matthews™ Executes Full-Cycle 1031 Exchange From Underperforming Asset to Well-Positioned Medical Office

HOUSTON, TX—Matthews™, a commercial real estate investment services and technology firm, facilitated the acquisition of a single-tenant net lease medical office property located in Kingwood, TX. Matthews™ Executive Vice President & Senior Director Josh Bishop, Vice President & Associate Director Brett Baumgartner, and Associate Alex Larramendi represented the client in an end-to-end 1031 exchange.

The buyer, a diversified healthcare investor, sought to optimize their portfolio through a 1031 exchange, trading out of an underperforming healthcare clinic in a tertiary Oregon market for a more stable, well-located medical asset. Leveraging the firm’s proprietary investor database, the Matthews™ agents secured a buyer for the downleg while simultaneously identifying the ideal replacement property with stronger fundamentals, a more sustainable rent structure, and superior long-term cash flow protection.

The upleg property identified was a 15,219-square-foot purchase property that is 100% occupied by Advanced Orthopedics & Sports Medicine, a division of OrthoLoneStar, the largest independent orthopedic group in Texas, with over 40 providers across four Houston-area locations and more than 40 years of operating history. Leased under a NNN structure, Advanced Orthopedics & Sports Medicine has operated the site for over 15 years. Situated near HCA Houston Healthcare Kingwood and within a five-mile radius of more than 142,000 residents, the property is well-positioned to benefit from sustained demand for healthcare services in the growing Kingwood submarket. During due diligence of the upleg, Matthews™ successfully negotiated a brand new roof, eliminating out-of-pocket capital expenditures for the buyer and delivering significant improvements at acquisition.

“It is not every day that we execute an exchange that checks every box, while the client also takes home a bigger rent check every month,” Larramendi said. “We are grateful to have had the opportunity to guide our client through both the downleg and upleg for a successful 1031 exchange, a process many investors find daunting given its tight time constraints.”

For more information, please contact Alex Larramendi, Brett Baumgartner, and Josh Bishop or visit www.matthews.com.

About Matthews™

Matthews™, a commercial real estate investment services and technology firm, holds recognition as an industry leader in investment sales, leasing, and debt and structured finance. Based out of Nashville, TN, and strategically positioned with over 1,000 agents and employees in 30 offices across the United States, Matthews™ continues to focus on expansion into new markets. For more information, please visit www.matthews.com.