Denver’s Medical Office Market Shows Signs Of Resiliency In First Half of 2020

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While the MOB market did soften as expected following the onset of COVID-19, strong preleasing is cause for optimism.

According to CBRE’s biannual report on the Denver medical office building market, which covers the first half of 2020, three projects totaling 124,000 square feet were delivered in the first half of the year, with 88.8 percent of the new supply pre leased. At the close of the second quarter, over 344,000 square feet of new MOB space was under construction. One was the 89,000-square-foot MOB at 100 Cook Street in Cherry Creek, which was 100 percent leased to UCHealth upon delivery.

“Healthcare consumers increasingly expect greater accessibility and a better experience when seeking out medical care. In response, healthcare providers continue to develop locations that are easier for patients to access. Outpatient visits to medical office buildings show no signs of slowing down and, due to this growth, MOBs continue to be the most popular property type within the healthcare real estate sector. With fundamentals that are more cycle-resistant than other more traditional property sectors, both tenants and investors are drawn to the consistent stability and positive income growth of MOBs,” said Stephani Gaskins, associate, CBRE.

The largest on-campus project under construction is the 96,600-square-foot St. Joseph Medical Office Pavilion, expected to deliver in fall 2020, which recently pre-leased 8,699 square feet of space to Children’s Medical Center. Another notable build is the Synergy Medical Center, which will bring 90,000 square feet of MOB space to the Southeast submarket in early 2021.

Since the beginning of the year, three MOB properties traded hands for a total volume of $52.0 million with an average price per sq. ft. of $241.80. The largest sale in the first half of 2020 was Ridgeline Medical Campus, which traded for $33.5 million ($244.54 per sq. ft.) to Healthcare Realty Trust.

 

Source: Mile High CRE

 

North Texas Walmarts Are Launching Oak Street Health Clinics

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Chicago-based Oak Street Health announced its arrival in North Texas earlier this year, and now the value-based network is partnering with the world’s largest corporation. Walmart will be launching Oak Street Health in three of its supercenters in Dallas-Fort Worth this year.

Walmart Supercenters in Arlington, Benbrook, and Carrollton will soon transition their Walmart Care Clinics to Oak Street Health centers.

“As we grow Walmart Health locations in other markets, we think Oak Street Health’s innovative value-based healthcare model will help us continue to deliver on our live better promise at these locations,” said said Marcus Osborne, senior vice president of Walmart Health via release.

A rendering of the Benbrook Walmart with Oak Street Health clinic (IMAGE CREDIT: Oak Street Health)

The clinics will offer comprehensive and preventative primary care and urgent care services. Extended hours for walk-ins and same day appointments are part of the plans as well. All patients are welcome to the clinic, but Oak Street says its focus is on the Medicare population. There are 60 Oak Street locations around the country and the clinics’ patients have experienced a 41 percent reduction in hospital visits and a 49 percent reduction in emergency room visits compared to Medicare benchmarks.

“It is our mission at Oak Street Health to rebuild healthcare as it should be, and that aligns directly with Walmart’s history of providing accessible and equitable health care in communities across the country,” said Mike Pykosz, CEO of Oak Street Health via release. “We look forward to becoming a positive addition to the neighborhood in these new markets and providing an unmatched healthcare experience in a convenient location.”

 

Source: D CEO Healthcare Magazine

Passavant Area Hospital Campus In Jacksonville To See $21 Million Expansion

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Ground will be broken today on a nearly $21 million expansion that will add 36,000 square feet to the Passavant Area Hospital campus and allow Springfield Clinic to expand its offerings in Jacksonville.

The Passavant Area Hospital campus

A two-story building will be attached to the northeast side of the hospital’s medical office building, which opened in June 2013 and has been the home to Memorial Physician Services-Jacksonville and Springfield Clinic.

“Springfield Clinic has wanted additional space so it can provide services to Morgan and surrounding counties. Springfield Clinic will lease all of the new space,” said Passavant Area Hospital President Scott Boston. “It will be increasing access for people in the community and not having them travel to Springfield,”

When the $20.6-million project is completed by fall 2021, Springfield Clinic providers will offer full-time coverage for cancer and family medicine services and part-time coverage in ophthalmology. These will be in addition to the numerous specialty providers already available in Jacksonville.

More laboratory services and an additional X-ray room will be provided and the additional office space will allow more Springfield Clinic specialists from Springfield to visit Jacksonville to see patients. Jen Boyer, vice president of operations for Springfield Clinic, said she was excited about the expansion of the clinic’s services.

“We currently have a heavy presence in the Jacksonville area. With this expansion, we’re able to have oncology services full-time in Jacksonville,” Boyer said.

Other specialties will include such areas as allergy, audiology, cardiology, dermatology, endocrinology, gastroenterology, nephrology, neurology, otolaryngology, plastic surgery, pulmonary, rheumatology, urology and vascular.

“With the expansion, providers will be able to better accommodate patients,” said Boyer. “Patients like — and are more comfortable when — they can stay within their own community. It’s important that the patients are pleased.”

The expansion was to be completed in the spring, but was pushed back because of the COVID-19 pandemic.

 

Source: My Journal Courier