Kaiser Permanente To Invest $100M To Build State-Of-The-Art Medical Facilities In Colorado

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To enhance service for its current members and to prepare for future growth,

Kaiser Permanente recently announced it is investing $100 million to build new and upgraded state-of-the-art medical facilities in eight communities across Colorado’s Front Range.

Two brand-new facilities will replace existing medical offices in leased spaces in Parker and Pueblo. The new medical offices will have innovative technology and be designed with a focus on environmental sustainability to achieve LEED certification.

The new facilities will make it easier and more convenient for members to see their doctor, fill a prescription, and get blood work or an X-ray, all under one roof. Construction for both the Parker and Pueblo facilities is estimated to begin in early 2024 with a targeted opening in Summer 2025.

“We’re proud to serve and invest in Colorado and build for the future,” said Mike Ramseier, president of Kaiser Permanente Colorado. “We’ve been laser-focused on providing the best health care, access, and affordability, and it’s paying off. Our membership is growing, along with our commitment to the Colorado communities we serve.”

Parker Medical Offices

The largest project includes building a brand-new 1-story 22,500-square-foot primary care medical office on 6.5 acres of previously purchased land at the northeast intersection of Parker Road and Hess Road in Parker. The new building in the booming South Parker community will replace Kaiser’s existing Parker Medical Offices at 10168 Parkglenn Way. Transitioning to a 30 percent bigger, newly designed facility will offer better functionality and better access to care with 67 percent more exam rooms. Members will have access to primary care clinics, behavioral health services, a pharmacy, a laboratory, and imaging.

Pueblo North Medical Offices

Kaiser is planning to purchase land before the end of the year in Pueblo’s north side to build a 1-story 15,000-square-foot primary care medical office from the ground up to replace the current space at 3670 Parker Blvd. This will put the proposed facility where the most population growth is occurring and serve as a second location from the Kaiser Permanente Acero Medical Offices in Pueblo’s south side. Along with primary care, pharmacy, laboratory, and imaging services, the new Pueblo North Medical Offices plan to provide rotating specialty care.

Additional Medical Offices

Kaiser is also planning extensive renovations of some of its largest regional medical offices in 2023, including the Baseline Medical Offices in Boulder, the Rock Creek Medical Offices in Lafayette, and the Lone Tree Medical Offices in Lone Tree. In addition, the company is continuing to upgrade the Franklin Medical Offices in downtown Denver with new medical and IT equipment, as well as updated furniture, paint, and flooring.

Early planning is also underway for either a rebuild or significant renovation of the medical offices in Lakewood and Westminster.

 

Source: Mile High CRE

Medical City Frisco Opens $91M Patient Tower

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Medical City Frisco’s new patient tower, located at 5500 Frisco Square Blvd., is readying to accept patients after a ribbon-cutting ceremony held on December 9th.

The $91 million project features 118,500 square feet of space, 36 additional patient beds and two floors. The building’s foundation allows for future construction of six more floors, according to a Medical City Frisco news release.

Additional project features include large patient rooms, a spacious waiting area and 300 more parking spaces.

“The project also includes enhancements to the hospital’s emergency department to facilitate better access for emergency medical service vehicles and staff. A new EMS entrance is planned to be operational later in December,” Medical City Frisco CEO Patrick Rohan said.

The new patient tower will accept patients starting Dec. 13. The project is part of Medical City Healthcare’s plans to invest $1.1 billion into its health care system in North Texas. It follows the completion of a $54 million, 150,000-square-foot medical office building that opened in 2020.

“Medical City Frisco is proud to continue to invest in our community and to live out our mission demonstrating our commitment to the care and improvement of human life,” Rohan said.

 

Source: Community Impact

Medical Office Buildings Continue To Stoke Net Lease Investors’ Interest

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Medical office buildings have emerged as a favorite among investors interested in single-tenant net lease opportunities, according to a new report from Colliers.

Overall, the STNL space posted strong performance in the first half of 2022 and hit a historic high of $40.1 billion in investment sales, according Colliers. However, volume in Q2 fell 35% over Q1 numbers and 17% year-over-year.

Despite that, the medical sub-sector remains strong. Colliers’ Jay Patel cites as one reason “predictable” cash flows and the price range on assets that appeals to both institutional and private investors alike. In addition, there’s COVID-19:

“Pandemic investors flocked to the medical office sector for its perception as a safe, interest- resistant and now pandemic-resistant asset,” Patel says. “During the pandemic, investors were eager to snatch up anything medical-related regardless of lease term, credit, and location.”

Construction pipeline delays have also contributed to an ongoing chasm between supply and demand, which has compressed cap rates.

“Net lease has also risen due to the ongoing supply chain disruptions, slowing the delivery of new product,” Patel says. “This has pushed more healthcare tenants to consider alternative space solutions like the adaptive reuse of traditional office or retail properties.”

Of course, the capital markets have changed this year — and medical office isn’t immune to those shifts. Patel notes that “while capital is still being deployed, investors are no longer scooping up just anything that’s healthcare assets.”

“Buyers are now taking a closer look at credit, lease terms and location. With inflation looming in everyone’s mind, assets that have strong rent increases are experiencing stronger activity,” Patel says. “To bridge the gap for investors that are feeling the burden of this rising interest rate environment, many developers and sellers are starting to shift pricing, which is creeping back toward pre-pandemic standards.

Colliers Julie A. Johnson predicts the asset class will continue to be strong in the near future despite rising capital costs.

“The past several years have been banner years for investors with historically low cap rates and many more buyers in the market than sellers,” Johnson told GlobeSt.com in an earlier interview. But “medical office buildings will continue to be strong with not only the increase of the senior population but also the population increase in many markets, specifically the Sun Belt cities.”

Patel says good lease terms and credit will be critical moving forward into 2023. While previously just one of those elements was needed to sell a property.

“Today’s market conditions necessitate all three factors carrying equal importance when appealing to investors,” Patel says.

 

Source: GlobeSt.