5 Medical Developments Under Construction In Frisco, Texas

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1. Heritage Business Park

The medical and professional office condos are expected for delivery by December. The outdoor space offers a large green area, water features and benches. The location is in close proximity to Baylor Medical Center, Methodist McKinney Hospital and Baylor Scott & White Medical Center.
Space: 1,300-9,054 square feet
Timeline: delivery fourth quarter of 2019
Address: 11655 Independence Parkway, Frisco

 

2. Baylor Scott & White Institute for Rehabilitation

The Institute is adding an extension to its existing building. It will include a new outpatient/day neuro-therapy gym, a driving simulator room, a neuropsychology and counseling area with an adjacent tranquility room, an enclosed courtyard and neuro-optometry. “This expansion enables the patients and communities we serve to have access to cutting-edge programs, resources and technology,” Baylor Scott & White Institute for Rehabilitation–Frisco CEO Ryan Seymour said in a statement. “The outcome and goal is to get patients, families and friends back to work and actively living normal daily life after injury or illness.”
Space: 12,000-square-foot extension
Timeline: broke ground May 16, expected to be complete first quarter of 2020
Address: 2990 Legacy Drive, Frisco

 

3. Building 2 of Waterstone Office Park

The building is under construction for Class A medical and professional office condos and is set to have seven suites.
Space: 2,178 to 15,740 square feet
Timeline: end of June
Address: 255 W. Lebanon Road, Frisco

 

4. Mateo Office Park

The office park has 14 professional office and medical spaces with its last building set to finish this fall. The development will provide suites from 1,500 square feet as well as a clock tower landmark with a roundabout.
Space: 2,000-10,000 square feet
Timeline: completion scheduled for this fall
Address: 8501 Wade Blvd., Frisco

 

5. Prestonbrook Circle Office Park

The development is set to complete 14 professional and medical office spaces in 2020 and is joined with upscale retail and restaurants for lease and sale.
Space: 1,250-5,790 square feet
Timeline: broke ground in May, completion in first quarter of 2020
Address: 6900 Preston Road, Frisco

 

Source: Community Impact Newspaper

Healthcare Is Entering A New Era Of Medical Office Development

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Meridian CEO John Pollock uses three words to describe the biggest trend in healthcare real estate at the moment: outpatient, outpatient, outpatient.

“As healthcare enters a new era, companies providing more outpatient services are on an upswing,” Pollock said. “We are in an era of tremendous growth in outpatient services,” Pollock wrote in an email to Bisnow. “In fact, we are so sure that outpatient services is where the industry is headed that this sector is nearly our singular focus at Meridian. I believe that as healthcare systems provide more care in a lower acuity setting, they will be able to provide a better experience for patients and at a lower price.”

Healthcare is undergoing a tremendous transformation. Healthcare is adjusting, evolving and growing rapidly as baby boomers continue to retire, millennials and Generation Z mature, and technology continues to shape the healthcare space.

“Now more than ever, bigger players and more money — especially from institutional investors — are entering the industry, CBRE First Vice President Angie Weber said. “These large providers have really taken over and the independent physician has become a thing of the past,”

Weber and Pollock are speaking at Bisnow’s National Healthcare West event June 20. Because of the growing population and the fact that most everyone at one time or another gets sick, healthcare is seen as a safe and resilient investment.

“It’s very safe and strong,” Weber said. “But it’s very expensive. The cost of managing staff and patients, tenant improvements and construction are very high.”

Outpatient demand is driving the development of medical office buildings greater than 150K SF, according to a JLL report released in May.

“No area of growth in healthcare is higher than outpatient services,” Pollock said.

There are currently 44 medical office developments larger than 150K SF under construction in the U.S., according to the report. The projects, estimated at $5.3B worth of investment, total nearly 11M SF and represent 22% of all medical office projects underway, the report states. Of the 44 projects, five are 450K SF or more, one is in the 350K SF to 449K SF range, eight are 250K SF to 349K SF, nine are 200K SF to 349K SF and 21 developments are 150K SF to 199K SF.

“This new trend is a function of the well-recognized growth in outpatient care with its focus on the patient experience and physician convenience with critical services and specialties housed under one roof, with the added goal of accountable care in a lower cost setting,” the report states. “The timing couldn’t be better given the surge in capital seeking investment opportunities in healthcare given the quality of tenancy and durability of medical office properties.”

Weber said the outpatient trend is being driven by a combination of demands from patients and medical providers. Many people, especially millennials, don’t like visiting a hospital for treatment.   Medical providers also find that it costs more to do certain medical procedures in a hospital than an outpatient setting.

“Along with preventive care options, medical providers are opening more specialized healthcare facilities, such as those that offer treatment for depression or post traumatic stress disorder and behavioral and mental health facilities,” Weber said.  “We’re going to see more of that,” she said. “I think you’re going to see these outpatient clinics in all shapes and sizes.”

 

Source: Bisnow

How ASCs Play A Role In Medical Office Transactions — 3 Insights From An Investment Director

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An influx of medical office investors is good news for ASC operators, according to John Nero, a director of the healthcare-focused investment banking firm Hammond Hanlon Camp.

Mr. Nero told Becker’s ASC Review how ASCs could be affected by medical office transactions — and play a role in them.

Question: What should ASC operators know about the medical office building market and activity right now?

John Nero: The medical office market continues to see an influx of new capital providers regularly, including private equity, institutional and offshore capital. These investors continue to create a market imbalance where capital outweighs the supply of quality medical office and ASC product, which bodes well for ASC operators that own their facilities and may want to evaluate opportunities to partner or sell in a favorable market environment.

Question: Every week, there are new transactions involving medical office buildings that have ASCs. Why do you think we see these kinds of facilities changing hands? Is it normal or noteworthy?

John Nero: Medical office buildings with ASCs tend to be viewed favorably, particularly when dealing with facilities located within certificate of need states, where the ability for the tenant to move the ASC is limited and the development of new competitive product is often restricted. While ASCs are specialized uses that cost a landlord more tenant improvement dollars compared with a more traditional medical office user, they also generate higher rents and have higher renewal probabilities upon lease expiration. Having an ASC in a multi-tenant building may also help attract physicians who perform cases to lease their office space there.

Question: What do medical office building operators prioritize when selecting a strategic capital partner?

John Nero: The top three factors medical office building operators look for when selecting a strategic capital partner are:

1. Alignment On Scale Expectations —This may be the most important element of creating a successful joint-venture partnership within any real estate sector, but in healthcare, it is particularly important. Some institutional capital providers can have unrealistic expectations of scale and capital deployment in this space. Most operating partners want to align with capital partners that are fairly well-educated on the nuances of the outpatient facilities sector, so that both sides understand what level of scale is realistic within the established investment strategy and defined timeframe.
2. Competitive Advantage — Every investor is seeking a competitive advantage, and this goes for both operators and capital providers. Operators are obviously looking for competitive economics in their joint-venture structures, whether it’s a favorable promote structure or eliminating requirements on crossing multiple investments within a program. They may also seek a sourcing advantage from their capital, as many private equity capital providers also have strategic investments in healthcare operating businesses (such as ASCs) that may surface off-market real estate opportunities.
3. Speed And Efficiency — Most medical office building operators see a tremendous amount of deals on a regular basis. As such, they need to be aligned with a capital partner that can respond quickly on whether or not to pursue opportunities in today’s competitive marketplace. The old mantra that “A fast ‘no’ is the next best answer to a ‘yes'” rings true here. Most new arrangements we’re advising on have some type of “three strikes” policy, whereby the capital partner can decline up to three opportunities that fit predefined criteria before the operator can pursue the transaction through another capital vehicle.

 

Source: Becker’s ASC Review