Montecito Medical buys Eugene outpatient building in $50.3 million deal

Montecito Medical bought PeaceHealth’s 157,296-square-foot outpatient building at 1200 Hilyard Street in Eugene for $50.3 million, and the sale-leaseback keeps the health system in place as the tenant under a 12-year lease.

That matters in practical terms for patients who go there for primary care, internal medicine, women’s health, pediatrics, urgent care, imaging, dermatology, endocrinology, anticoagulation, ENT and behavioral health. JLL Capital Markets, which represented PeaceHealth in the transaction, described the six-story building as fully leased and positioned two blocks from the University of Oregon campus.

The deal is part of PeaceHealth’s larger reset around its University District footprint. PeaceHealth announced on March 10, 2025, that it would list the campus for sale after closing Sacred Heart Medical Center at University District in December 2023. Since that hospital shutdown, PeaceHealth has said the remaining clinics and inpatient services would stay open in their current locations during and after the sale process while the system looks for longer-term locations for some services.

The building at 1200 Hilyard had already become a key clinical site in that transition. PeaceHealth moved West Eugene Urgent Care there in late 2023, pending renovations, shifting care closer to the University District campus as the system consolidated services away from west Eugene.

For Lane County, the transaction signals a healthcare market where real estate and care delivery are increasingly being separated. Montecito Medical, which says it has more than $6.5 billion in acquisitions to date, is one of the country’s largest privately held buyers of medical office properties. PeaceHealth, meanwhile, has framed the campus sale as part of a broader effort to reinvest in Lane County, even as it pares back its old hospital footprint in Eugene and moves more services to RiverBend in Springfield.

The University District campus has already seen other changes, including a 2025 agreement for Bushnell University to buy two buildings there. The latest sale shows the remaining medical properties are still valuable, but for patients the bigger point is simpler: ownership at 1200 Hilyard can change without forcing a disruption in day-to-day care.