Cypress West Partners, a real estate investor, is expanding its portfolio of healthcare assets with properties across the nation’s southern half.

The Rancho Santa Margarita-based firm in March paid $21 million for a medical office building in Scottsdale, Ariz.

The 84,725-square-foot property, dubbed McDowell Mountain Medical, is the first purchase in Cypress West’s joint venture with global investment manager TPG Angelo Gordon.

The JV allows for the acquisition of up to $300 million in healthcare assets. It is seeded by the recapitalization of a four-property portfolio that totals approximately 200,000 square feet across Arizona and California, according to company officials.

The JV is focused on buying medical office properties in the Sun Belt, which has been seeing considerable population growth, among other factors conducive to healthcare industry growth, according to Cypress West Chief Executive Chris Cumella.

“There are lots of hospitals headquartered there and a big retirement population,” he told the Business Journal.

Much of the U.S.’s southeastern states have also shown promise he said, while states in the northeast “have hurt [our assets],” due to higher costs of living and shrinking population.

Other markets Cypress West is eyeing for acquisitions include Texas, Utah, Louisiana and Alabama.

CBRE Investment Banking arranged the JV between Cypress West and TPG Angelo Gordon.

Cypress West’s portfolio currently totals over 600,000 square feet across California, Nevada, Texas, Arizona, Mississippi and New Jersey, among other states.

Properties acquired by the JV will either be leased, repositioned or redeveloped, Cumella said.

The goal, Cumella noted, is to get each property’s internal rate of return, or expected profit, to around 16%.

Cypress West plans to bring more tenants into its recently acquired McDowell Mountain Medical office, whose deal works out to about $250 per square foot.

The property, located about a mile from Arizona State Route 101 at 9377 E. Bell Road, is currently 93.2% leased, according to real estate market data tracker CoStar Group Inc.

“There are a couple suites we can lease up,” Cumella said.

Some tenants at the property include Select Physical Therapy, Ong Plastic Surgery, The Hormone Zone, Arizona Digestive Health Inc. and Royal Spine Surgery.

Cypress West aims to increase rent for McDowell Mountain Medical tenants, who are currently paying 20% less than the market rate, he said.

“There’s some room to bring the renewal rate back up,” Cumella said.