Seattle-based BearRock Investments LLC has acquired Providence Medical Center building, at 110 W. Cliff Drive, on Spokane's lower South Hill, for $5.9 million, say Doug Barrett and David Rothrock, co-founders and principals at BearRock.

BearRock bought the four-story, 70,000-square-foot building from Renton, Washington-based Providence Health & Services-Washington in a transaction that closed July 29, says Barrett.

Burlington, North Carolina-based Laboratory Corp. of America and its predecessor, Pathology Associates Medical Laboratories, were the sole occupants of the building for decades, but Rothrock says about 21,000 square feet of space is now available for lease on the fourth floor.

"It's the first time in 20 years that there's any space in this building, so we really want to work with the community to get some great tenants and help enhance the medical community right there in the hospital district," says Barrett.

Currently the building has two tenants, LabCorp, which operates in over 40,000 square feet of space on the first three floors of the building, and Providence, which will lease 8,200 square feet of medical lab space on the third floor.

BearRock plans to update the property with paint, new signage, and a first-floor lobby renovation. The company also has reserved funds for future tenant improvements on the fourth floor, they say. 

 "We really feel like we can meet the market with either one large user or several smaller users," Barrett says, adding that the fourth floor can be divided into up to three smaller units of about 7,000 square feet in size.

The 3-acre property also has over 250 parking stalls. 

The building was constructed in 1967 and operated as an assisted living facility before Spokane-based Bouten Construction Co. renovated the site in 2001, changing the structure to its current medical office use. BearRock also worked with Bouten for building inspections and due diligence for the transaction, Barret explains.

Barrett and Rothrock, both of whom have Spokane roots, say the medical office market here is attractive to investors due to low vacancy rates for health care buildings.

"While the office market has been challenged in Spokane and nationally ... the medical office market has stayed very strong and robust, with very low vacancy rates particularly around the hospital submarkets," Rothrock says. 

Erik Nelson and Craig Soehren, both of Spokane-based commercial real estate brokerage Kiemle & Hagood Co., handled the transaction. BearRock will continue working with Kiemle & Hagood to manage the property, Barrett says.

BearRock's purchase of the Providence Medical Center building is the company's sixth commercial real estate acquisition in Spokane.