Medical Office Building Sales Surpass $10 Billion For Fifth Consecutive Year

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U.S. medical office building sales continued in an upward trend through the fourth quarter of 2019 and into 2020, driven by steady M&A activity within the healthcare market, says Cleveland-based Brown Gibbons Lang & Company (BGL).

Total MOB sales reached $11.2 billion in 2019, marking the fifth consecutive year that sales surpassed $10 billion and the third successive year topping $11 billion.

“The 2019 tally underscores the fact that medical office properties remain a core asset class,” says BGL. “Demographic and healthcare industry trends are firmly entrenched and forecasted to persist, supporting long-term demand for medical office space.”

Q4 2019 saw a total of 379 MOB deals valued at $4.3 billion, representing a 20% increase in transaction value. The average price per square foot decreased by 8% to $274 per square foot. The cap rate remained unchanged to 6.6%, pushing the 12-month average to 6.6%—a marginal contraction from from 6.7% over the previous 12-month average.

Based in Chicago, MB Real Estate (MBRE) emerged with a 29% share of acquisition volume in the Southeast market and a 12% share nationally in Q4 2019, according to BGL. MBRE’s reach in the Southeast was underscored by the purchase of 900 Village Square Crossing in Palm Beach Gardens, Florida..

Completed in 2012, the two-story, multi-tenant building with 38,944 rentable square feet was acquired from Prestige for approximately $381 per square foot, which is 15% and 23% above the regional and national averages, respectively.

“While sales volume is down year-over-year, pricing remains strong across medical office investments as investors seek to take advantage of continued strength in the U.S. economy,” says BGL. “We continue to see strong demand for medical office assets from public and private REITS as well as private equity and foreign capital investors. Major players dominated M&A activity throughout 2019, which is likely to continue; however, new investors are entering the marketplace, which is setting the stage for a busy first half in 2020,” according to BGL’s report. It also cites a fact that bears repeating: “U.S. healthcare jobs outpaced nearly every other sector during 2019.”

 

Source: Connect Media

Disney’s Team Of Heroes To Help Transform Three Central Florida Children’s Hospitals

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Disney’s Team of Heroes initiative that began two years ago will soon be expanding to three Central Florida children’s hospitals

The five-year, $100 million investment brings popular Disney stories to the hospitals, and hopefully a bit of comfort and joy to the patients.

Disney will create interactive play spaces, murals, interactive art, and more to provide distractions during what could be a stressful hospital stay.

Transformations will begin soon at AdventHealth for Children, Arnold Palmer Children’s Hospital, and Nemours Children’s Hospital. Disney has worked with patient care experts to design the re-imagined spaces that help create healing experiences that are “distinctly Disney.”

Here’s a look behind the scenes at one of the transformation that Team of Heroes is bringing to hospitals around the country:

Dr. Rajan Wadhawan, senior executive office of AdventHealth for Children:

“At AdventHealth for Children, we see first-hand the joy and reactions that come from patients and families who experience our Walt Disney Pavilion. Bringing that joy can be very important at what otherwise can be a stressful time in our patients’ young lives. Part of the whole-person care we provide is healing the body, mind, and spirit. These transformations will continue to make a positive impact on our patients’ spirits and bring even more comfort and happiness during their time with us.”

Cary D’Ortona, president of Orlando Health Arnold Palmer Hospital for Children:

“Walt Disney World and Orlando Health Arnold Palmer Hospital for Children have been working together to give back to our community since we first opened our doors in the 1980s. Receiving medical care in a hospital setting can feel especially scary and overwhelming for kids. Disney gets right to the heart of helping bring magic to our patients and their families during what is often a difficult time.”

R. Lawrence Moss MD, president and CEO of Nemours Children’s Health System:

“Together, Disney and Nemours Children’s Hospital are brightening the hospital experience for children and families facing serious health issues. Disney is bringing impactful elements into our healthcare space, such as interactive technology. With these new advancements at our fingertips, this program will help us continue providing exceptional care and actively ensure children can be children while they heal.”

Click here to view Disney Parks YouTube video ‘Three Central Fla. Children’s Hospitals & Their Patients to Benefit from Disney Transformations’

 

Source: Walt Disney World News

Delray Marketplace Could Get Medical Office Building Despite Cap On Commercial Space — How Is That Possible?

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It’s the second time in less than a month that the planning commission accommodated a builder whose project was jeopardized by rules designed to limit development in the Ag Reserve.

The County Planning Commission voted 7-6 earlier this month to initiate a change in the county’s growth plan to increase the commercial cap in the Agricultural Reserve — a move is designed to allow a 13,000-square-foot, medical office building on a narrow, two-acre lot at Delray Marketplace.

This marked the second time in less than a month that the planning commission accommodated a builder whose project was jeopardized by rules designed to limit development in the Ag Reserve. In early January, the commission voted to initiate a change to the growth plan that will consider self-storage facilities as noncommercial and, therefore, exempt self-storage from the commercial cap.

“How many more times are we going to increase the cap or make exceptions?” Planning Commissioner Dagmar Brahs asked her colleagues.

She “implored” them to vote against the project at Delray Marketplace.

“At least wait until Atlantic Avenue is widened from State Road 7 to Lyons Road,” Brahs said.

“Traffic congestion now is ridiculous,” Commissioner Spencer Siegel said. “However, approving the project was a way to force county commissioners to decide whether an in-depth review of Ag Reserve rules should be conducted.”

The planning commission vote to “initiate” the change to increase the commercial cap will be taken up by the county commission on February 5. County commissioners, if they support the planning commission, will eventually have to hold public hearings.

The lot is on Atlantic Avenue sandwiched in between the Marketplace to the east and a kennel currently under construction to the west. It is a preserve parcel, which means nothing can be built on it. So the builder found another two-acre lot in the Ag Reserve that will be preserved in exchange for allowing the property at the Marketplace to be developed.

Siegel noted that the existing preserve parcel at the Marketplace is idle land and the new preserve parcel, about a mile away, is better suited for agriculture. Other commissioners said they were frustrated at the number of preserve parcels that are not being used for agricultural purposes such as the one at the Marketplace. County planners said it should not have been approved as a preserve parcel.

To accommodate the builder, the county’s growth plan needs to be amended. Staff called the change “inappropriate” and an effort to “circumvent” the growth plan. The lot is only 33 feet wide by approximately 670 feet deep. Staff said approval triggers policy issues such as “piecemeal development.”

Jennifer Morton, the builder’s agent, told the commission that there is a need for more medical office space on Atlantic Avenue. The builder, Garret Bender of Delray Beach, has already opened a medical office complex just east of the Marketplace on Atlantic Avenue. It is fully leased, and Bender already has a physician interested in operating in his Marketplace building, according to Morton.

Morton noted that her client’s project will increase the current cap of 1,015,000 square feet by just 1.3%. The county has already increased the cap three times since 2016, adding another 94,000 square feet of commercial space during that time. When the Ag Reserve rules were written in 2002, the cap was set at 750,000 square feet. Commercial development is restricted to within a quarter-mile of either Atlantic Avenue or Boynton Beach Boulevard.

Morton said if the commissioners decided against raising the commercial cap, she proposed they get around the cap by considering the medical office building “commercial low office” and then exempt that category from being considered commercial. That option was not taken up by the planning commission.

Voting to increase the cap and allow the medical office building to be built were Siegel, Edwin Ferguson, Kiley Harper Larsen, Jim Knight, Marcia Hayden, Angella Vann and Eric Royal.

Voting against increasing the cap were Brahs, Barbara Roth, David Dinin, Lori Vinikoor, Alex Garcia, and Evan Rosenberg.

 

Source: Palm Beach Post