Western Real Estate Business • November 2022

www.REBusinessOnline.com November 2022 • Volume 20, Issue 3 HEALTHCARE REAL ESTATE: IS IT ‘RECESSION PROOF’ LIKE WE ONCE THOUGHT? Healthcare real estate is facing challenges, but there is still a silver lining of good fundamentals. By John Pollock W hen you Google “the most recession-proof commercial real estate industries,” medi-cal ofﬁ ce comes up in nearly every article displayed in the search results. I attended the InterFace Healthcare Real Estate national conference in September where there was much talk about the industry’s headwinds. Fortunately, the underlying fun-damentals of healthcare real estate remain sound. The sheer number of Baby Boomers over 65, their chronic conditions and their need for medical attention will ensure that demand for more convenient sites of care will re-main strong for the foreseeable future. Capital Markets Tighten What a difference a few months makes. Meridian closed escrow on 3901 Broadway, a 56,000-square-foot speculative ofﬁ ce-to-medical con-version in Oakland, Calif., in March. Located near the hospital-heavy area referred to as “Pill Hill,” the sale fea-tured non-recourse debt and leverage of 65 percent. see HEALTHCARE, page 21 Last October, Meridian completed renovations of a 53,574-square-foot of ce building in Santa Ana, Calif., successfully converting it into a Class A medical of ce building. IS EXPERIENTIAL RETAIL/EATERTAINMENT OUT OF THE WOODS – OR ARE THERE HAZARDS AHEAD? In ation hit an all-time high in May, fueling talk of a recession. With a comeback clearly on the horizon, experiential retailers are wondering if there are new headwinds to watch out for. little more than two years ago, retailers and restaurants were ordered to close across the country. With only essential stores and services allowed to stay open, the retail scene and landscape were changed forever. Looking back, leaders in the retail industry recall the budding excite-ment around an emerging category that was crystallizing in the face of a growing battle between ecommerce and brick-and-mortar retail: experien-tial retail. Just as the exciting experi-A By Matt Berres ential wave was gaining momentum, however, the global pandemic seem-ingly took the wind out of the seg-ment, leaving it seemingly gasping for air. Or did COVID just make it stronger? While there were some deﬁ nite setbacks — from which many retailt-ainment brands would never recover — there were also some leaders and standouts that revolutionized the re-tail experience. They ultimately paved the way for an exciting retailtainment category. Topgolf (Sport/Retail/ Eatertainment) Like other non-essential retailers, Topgolf was forced to close all 56 facil-ities in 2020. However, later that year, golf industry heavyweight Callaway agreed to buy Topgolf in an all-stock deal. “Topgolf is the best thing that happened to golf since Tiger Woods,” said Chip Brewer, Callaway CEO, at the time of the acquisition. Fast-forward one year later and Topgolf is leading the charge for Cal-laway. The company declared that fourth-quarter 2021’s outperformance was driven by strong Topgolf same-venue sales. For the year, the com-pany estimated segment revenue to reach $1.5 billion for the 12-month period that will end Dec. 31. At that time, Callaway expects Topgolf to be-come the company’s largest segment by revenue. With notable growth over the past couple years, investors around the world are demonstrating a great deal of interest in Topgolf properties. see EXPERIENTIAL RETAIL, page 22 INSIDE THIS ISSUE Schnitzer Properties has acquired two core centers in strong markets — and is seeking further retail assets. page 20 San Bernardino Market Highlight page 14 Reno Market Highlight page 16 C-PACE Can be the Ace in the Hole for Green Project Funding Today page 18