Texas A&M To Build $546M Complex In The Texas Medical Center

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The Texas A&M University system just announced that it will spend more than half a billion dollars to build a new complex in the Texas Medical Center.

The $546M price tag will include the construction of two new towers, as well as the purchase and renovation of a third building. Texas A&M has already acquired 1020 Holcombe Blvd., an 18-story building that is undergoing renovations. The building will be used for the university’s two-degree Engineering Medicine program, which will allow students to earn a master’s degree in engineering from Texas A&M, as well as a medical degree from the university’s Health Science Center.

The purchase and renovations are expected to cost $145M, and the overall project is expected to be completed by the summer. In addition, Texas A&M will build two new towers: a student housing project, and a mixed-use development for medical offices and retail. The mixed-use building is an integrated medical plaza. The 30-story, 587K SF building will contain 72K SF of retail space and 8,700 SF of green space, and will also include a 13-story parking garage and a grocer.

“We’re looking for a grocer for this because we’re trying to support our EnMed students and our Prairie View students. This is the catalyst, and have them a nice, safe place to live,” Texas A&M Vice Chancellor of Business Affairs Phillip Ray said at a press conference.

The medical plaza is expected to break ground in the fall of 2021, and completion is slated for June 2023. The student housing project will be a 19-story, 365K SF building with 572 units and 704 beds. It will include a 1.2M SF parking garage with 3,444 spaces. The project is expected to break ground in October, and is slated for completion in June 2022. Both projects will be constructed through public-private partnerships. The combined price tag of the two new projects is $401M.

Texas A&M Chancellor John Sharp told attendees at the press conference that the new complex would help bring the assets of the Texas Medical Center to the rest of the state.

“What we want to do is take the future of medicine, which is embodied in the Engineering Medicine program, where really smart kids are going to become the developers of the medical care technology of the future,” Sharp said.

“We’ve done a little over $2B in P3, privately funded projects during Chancellor John Sharp’s tenure, and this will be the largest one,” Ray said.

Sharp has been chancellor since 2011. The developer of the P3 projects is Medistar Corp. American Triple I Partners, founded by Texas A&M alumni Henry Cisneros, is part of the financing team. EYP led the design of the renovated building, while Kirksey Architecture designed the two new towers. Linbeck Group will construct the two new buildings, while Vaughn Construction is the contractor for 1020 Holcombe Blvd.

 

Source: Bisnow

Borrowers And Lenders Are Adapting To The Hot Heathcare Real Estate Market

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When it comes to financing medical office building (MOB) acquisitions, the cost of capital is not always the most important factor in choosing a lender.

“In fact, when a nine-property MOB portfolio in the Atlanta area changed hands in a sale-leaseback transaction in late 2019, the borrower on the $25 million loan chose to go with a lender that did not have the lowest cost but that knew the tenant best so that they could make sure that everything would go quickly through due diligence and get to closing and not hit any bumps along the way,” said Sabrina Solomiany, a first VP, US Healthcare Capital Markets Debt & Structured Finance with CBRE Group Inc. (NYSE: CBRE), who helped line up the debt for the buyer. “It was very competitive, but ultimately we went with Synovus, with part of the reason being that even though they did not necessarily have the most competitive terms, they actually had a banking relationship with the physician group.”

Ms. Solomiany made her remarks during the recent Revista Medical Real Estate Investment Forum 2020, held Jan. 27-29 at PGA National Resort & Spa in Palm Beach Gardens, Florida. She was part of a panel session titled, “Debt Outside the Box: Construction, Mezz & Alternative Asset Classes.” Joining Ms. Solomiany on the panel were: Natalie Sproull, VP with Capital One (NYSE: COF), as moderator; Jim Barnes, director of Healthcare Specialty Lending with Synovus Financial Corp. (NYSE: SNV); and Andrew Smith, managing director with Los Angeles-based Kayne Anderson Capital Advisors LP.

During the session, the panelists discussed some of the latest trends in healthcare real estate (HRE) financing when it comes to acquisitions as well as development deals. Part of the discussion focused on how and why certain HRE deals get done.

“When it comes to construction financing of medical projects, people are often surprised that the first few things I consider are not always financial in nature, said Mr. Barnes of Columbus, Ga.-based Synovous. “I like to look more at the expertise of the developer,” he said, “making sure that the developer really has a deep experience in delivering medical properties on time and within budget. This has become much more important recently with the trend toward greater institutional equity investment and, for the most part, the institutional investors having much less expertise in construction than the developers. Secondly, the firm looks for strong sponsorship either from a hospital system or a longstanding, stabilized private practice – something that will create an anchor within the property.”

 

Source: HREI

700-Foot Vertical Medical City Being Planned On Biscayne Boulevard, Valued At $2.1B

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An Orlando company submitted plans to the Federal Aviation Administration last week for a 700-foot downtown Miami project called Vertical Medical City Biscayne.

The application was filed on January 22. According to the application, the project will be built in the 1600 block of Biscayne Boulevard. Construction is scheduled to begin in January 2021.

An affiliate of Ponte Health Properties, LLC is the developer. A press release from Ponte in October 2019 said that Vertical Medical City Biscayne will be built in the Bayfront Park vicinity in downtown Miami. The project will be valued at $2.1 billion and include 90+ stories of development, the release said.

Ponte is also planning similar projects in Orlando and Chicago. All Vertical Medical City locations are planned to include residential Independent Living, Memory Care Units, Urgent Care, Medical Office and Outpatient Surgery and Services Spaces, Urban Farming, and Research and Development spaces as part of a complex mixed-used geriatric-focused project, according to Ponte.

Source: The Next MIami