The Bucktown Medical Campus is a medical office portfolio comprised of five, single-story buildings totaling 141,920 sq. ft. located in Langhorne, PA, 20 miles northeast of Philadelphia’s city center. The portfolio is 80% occupied and has a weighted average lease term of nearly 6 years. The property is currently utilized as traditional office, medical office, and flex space.
The investment presents a value-add opportunity and we expect to convert the traditional office and flex space into medical office use over time, which achieves higher rents, longer lease terms, and higher renewal probabilities. The current tenant mix is weighted 36% medical, 30% office, and 23% flex.
The acquisition provides an attractive opportunity to create a cohesive, local medical campus in the submarket, with synergies across two GCREIT owned properties, Bucktown Medical Campus I and Bucktown Medical Campus II.
This acquisition offers attractive value-add upside with the conversion of additional medical office space over the hold period. Medical office tenants tend to be stickier than traditional office tenants, resulting in higher renewal probabilities and higher rental rates creating an compelling upside.”
Langhorne, PA in Bucks County, is the third wealthiest and fourth most populous county in the state. Bucks County is located approximately 20 miles north of Philadelphia and attracts residents with its quality of life, highly rated school districts, regional and retail dining options, and top-notch medical institutions.
The property is strategically located within a 10-mile radius of nine regional hospitals which makes the property an ideal location for medical uses affiliated or sharing synergies with these surrounding hospitals.
The property benefits from favorable population demographics given the median household income for Bucks County is greater than that of the state and national household income. The property also provides tenants with good accessibility, as it is minutes from the I-95 interchange, providing access to Philadelphia to the south, Princeton to the north, and connectivity to the local area’s sizable population.
Demographics surrounding the property are particularly favorable for medical office uses. Nearly 700,000 people live within a 10-mile radius of the property, of which approximately 121,500 are over 65 years old. This age cohort is expected to increase by 17%, to 142,000 by 2026, which will continue to bolster the need for healthcare providers. Further, according to Revista, 92% of the population within a 10-mile radius is covered by private or public health insurance.