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Aug. 22, 2013

Former Medical Offices Might Become Apartments

Edit Square thumbnailBy Dees Stribling, Contributing Editor

Kansas City, Mo.—Diversified Asset Management (DAMCO) has acquired Highland Tower in Kansas City, Mo., which currently includes about 116,500 square feet of office space, though most of it is vacant. It’s located in the Brookside neighborhood, a portion of the Country Club District, and the new owners are exploring the redevelopment of the property into mixed-use building with about 300 apartment units.

Matt Ledom, with Block Real Estate Services, represented the buyer in the deal. Aaron Mesmer and Bruce Johnson, also of Block, handled the sale on behalf of the owner, Cadles.

The property was formerly a medical office building, built in 1973 and renovated in the ’90s, owned by an out-of-town investment group. With the downsizing of Baptist-Lutheran Hospital in the mid-2000s, the area became a less viable location for medical-related tenants, making a repurposing of the property a distinct possibility.

Plans have been mulled to redevelop the adjacent Research Medical Center-Brookside Campus, which is the site of the former Baptist-Lutheran. Those plans called for 266 market-rate seniors housing units and other commercial buildings.

DAMCO is no stranger to buying distressed office towers in Kansas City. The company purchased the BMA Tower in 2002 and repositioned it as condos. According to DAMCO president Mark Ledom, the Brookside/Waldo area lacks a high-density apartment property, adding that he believes that the redevelopment will appeal to empty nesters in the area

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