The Elizabeth Hospice recently purchased a medical office building complex in its home state of California for a price tag of $8.1 million.
As 2022 came to a close, the nonprofit hospice provider took ownership of the 26,945-square-foot property in Escondido, California.
The decision to purchase the building was several years in the making and involved multifaceted considerations, according to Sarah McSpadden, president and CEO of The Elizabeth Hospice.
One consideration was the cost-savings potential. The nonprofit hospice previously leased its central office space before determining that purchasing a building would “significantly reduce” the organization’s overall annual expenses, McSpadden said. The hospice estimates $3 million in cost savings from buying rather than renting a space.
“Our financial focus over the years has always been to deliver high-quality care while carefully managing our costs to secure the future,” McSpadden told Hospice News in an email. “During the last several years as we reviewed our strategic plan, it became clear that pursuing building ownership would be a significant factor in managing our finances and planning for the future needs of our community. Through building ownership, The Elizabeth Hospice [will] build equity while reducing lease expenses and, in this way, free up monies that we could use for programs and services.”
Established in 1978, The Elizabeth Hospice provides palliative and hospice to children and adults throughout San Diego and Southwest Riverside counties in California.
The hospice’s current corporate office location is also based in Escondido, California near the newly purchased building. The organization ensured that the new location was easily accessible from major roadways and central to its service region.
Another important consideration was the capacity to accommodate long-term growth in The Elizabeth Hospice’s workforce and scope of services, according to McSpadden.
“We plan to strengthen existing programs and develop services based on community needs,” McSpadden said. “For example, since our skills learning lab is unique in San Diego, we are exploring using this resource to support the community by addressing the growing shortage of skilled health care workers. Another service we are developing is a telehealth triage center that improves health care delivery by allowing staff to remotely monitor patients to identify issues before they become problems, as well as allow patients to have quick and direct access to clinical staff.”
The Elizabeth Hospice’s staff cared for 2,667 hospice patients and 756 palliative patients from 2020 to 2021, according to its 2022 annual report. The nonprofit provider’s annual revenue reached nearly $50.1 million during that time period.
The Elizabeth Hospice maintains a $1 million interest-bearing line of credit with a financial institution, secured by cash, investments and other assets.
CDC Commercial represented The Elizabeth Hospice in the real estate transaction. The seller, an unidentified local investor, was represented by global real estate firm Cushman & Wakefield’s private capital group.
“This is a beautiful, high-image building with modern interior and exterior design that provides a nice and comforting environment,” Cushman Senior Director Mark Avilla said in an announcement. “The location is also easily accessible near Interstate-15 and State Route 78, while there are a variety of amenities surrounding the property.”
Initially, The Elizabeth Hospice will initially occupy 80% of the asset before taking over the entire building as existing tenants vacate, according to the Cushman announcement.
Several medical billing and home health businesses were previously housed in the building, including Palomar Home Health Services. The home health agency is part of Palomar Health, a health system serving the greater San Diego area. The health system operates two hospitals and provides community- and facility-based hospice, skilled nursing, behavioral and pediatric care in addition to home health.