South Florida’s Largest Health System Creates 200 Jobs With New Medical Center

/in , /by

Baptist Health South Florida opened a 112,000-square-foot outpatient medical center in Plantation, its largest facility in Broward County.

The nonprofit is creating 200 jobs in the facility at 1228 S. Pine Island Road, spokeswoman Georgi Morales Pipkin said, and hire additional people as services expand.

The facility’s slate of services includes urgent care, family medicine, diagnostic imaging, cardiology, cancer care, orthopedics, physical therapy, and outpatient surgery.

 

Click here to read more about this story.

Real Estate

Texas Is ‘Going Big’ In Biopharma

/in , , , /by

Texas wants to get the word out: It’s not just for oil and pipelines anymore.

The Lone Star State is a rapidly emerging biopharma hub, with more than just a lone focus on oncology. Houston and Austin are home to some of the top up-and-coming biopharma companies, and real estate powerhouses like Hines are anchoring major new developments with them.

Ridgeline Therapeutics is one such company, established in 2012 and spun out of technology invented by founder and CEO Stan Watowich at the University of Texas Medical Branch. Ridgeline develops small molecule inhibitors of nicotinamide N-methyltransferase (NNMT) to reverse Type 2 diabetes, obesity, muscular dystrophies and sarcopenia (age-related muscle degeneration).

During the past year, the company has begun to ramp up, hiring, applying for funding, developing the program and advancing projects closer to IND filing and clinical trials. How has their residence within JLABS@TMC, part of the Johnson & Johnson Innovation-JLABS incubator ecosystem, helped during this year of rapid acceleration?

“Working in Houston, for a biotech company, I think is great,” Watowich said. “The ecosystem, it’s not small, but it’s not out of control, so you can actually get to know many of the other companies, the other CEOs, see what they’re up to, share ideas, thoughts…the even bigger thing is you have access to all of these academic labs.”

Texas, and Houston in particular, has certainly caught the attention of the real estate development market. Audrey Symes, Director of Research, Healthcare, Life Sciences and Advisory at JLL, an American commercial real estate services company, explains why the city is at the top of their up-and-coming markets list.

“There are a couple markets that are right at the gate, ready to go, but I would say that the number one that is really emergent right now is Houston,” Symes said. “Houston has an amazing network of both medical practitioners and incubators, universities such as Baylor [The Baylor College of Medicine], the Texas Medical Center, and MD Anderson I think is the premier cancer research hospital in the US if not the world. So Houston has been really at the precipice of rising into the next rank for quite some time.”

Academic institutions rounding out the illustrious network include Rice University, The University of Texas Health Science Center at Houston,  Texas A&M University, and The University of Texas Southwestern Medical Center in Dallas.

“You have a lot of idea flow coming out of this, and a lot of people thinking about starting companies,” Watowich explained.

With the commanding presence of the MD Anderson Cancer Center, the largest cancer center in the U.S., and one of the most preeminent in the world, the assumption would be that oncology is the state’s number one focus. According to Watowich, it is only at the center of a wide range of therapeutic passions:

“I would say oncology is definitely a strength in the medical center,” said Watowich. “Because you have MD Anderson, you have the Baylor college of medicine, you have some of the hospitals with their specialized care. But I would say neurological diseases are a strength, metabolic diseases are a strength, muscular diseases are a strength…it’s hard to say where there’s not a strength.”

Hines is a privately owned global real estate investment, development, and management firm traditionally known for its office spaces. The company has been diversifying significantly during the past decade, and two of their key focus areas – life sciences and senior living– mirror two of society’s biggest current priorities: healthcare and the rapidly aging population.

In July, Hines finalized a deal with 2ML Real Estate Interests to build a mixed-use life sciences and technology-based development called Levit Green, next to the Texas Medical Center. The company plans to break ground on the phase I building in the third quarter of 2021 and complete construction in late 2022.

“It’s not often that an organization can have the opportunity to develop 50 plus acres adjacent to the largest medical center on the planet. That opportunity came along, and we thought it was absolutely intuitive that you could marry up that type of opportunity next to something like the Texas Medical Center,” said John Mooz, a senior managing director, and market head of Houston/Austin/San Antonio at Hines.

For industry and real estate developers alike, the cost of building, and cost of living can often make the difference when deciding where to locate.

“In our trying to understand what the best end-users are for Levit Green, I do think they will be both organically from here, but also locating from either coast where among other things, it’s expensive to build relative to Houston,” Mooz said. “You have gross rates that top $100 psf, and Houston can be almost half of that. And when you’re looking at a company with early-stage funding, that can be a huge difference. So I would argue that Houston can attract top talent and top organizations with an incredibly affordable quality of life, and strong diverse, cultural offerings. With the global oncology pharmaceutical market projected to be worth approximately $200 billion by 2023, Houston is primed to move to the top of any emerging life sciences cluster list. That’s a pretty strong trajectory in a place that spends a lot of time studying cancer. You combine it next to a medical center that has over 9,200 beds, and we have, by anyone’s count, somewhere in the order of 1100-1200 clinical trials going on right now.”

For all of its merits, Texas is still growing into the biopharma mentality when it comes to capital investment.

“Where Texas really falls behind is capital,” Watowich said. “It’s not that they don’t have money…most of the money is from pipeline and it’s hard to get them to understand that investing in biotech per se isn’t really that different from doing a very deep offshore oil well. The risks are comparable, the timeline’s comparable, and the money’s comparable.”

Watowich is working with other Houston and Texas leaders to launch the Accelerator for Cancer Therapeutics. This Accelerator will assist entrepreneurs aiming to turn their research discoveries into clinical-stage biotech companies supported by forward-thinking investors and non-dilutive funding.

“People need to be willing and accepting of taking risks. And culturally, that doesn’t happen everywhere,” said Travis McCready, Executive Director, U.S. Life Sciences Markets at JLL. “The three mega markets that exemplify this are greater Boston, the Bay area, and San Diego. They (Houston) have a really glowing and exciting creative scene, and I like the creative economy as a measure and metric of risk.”

“The other key for Texas is an injection of privately-led development dedicated to the life sciences market, Mooz said. “Texas Medical Center, I believe is the eighth largest business district in the United States, and the work and the development that’s gone on there is astounding. It’s mostly by in-place organizations and not privately-led development, and that’s what’s been missing. I think what we really need is purpose-built facilities to accommodate all of that R&D, and that’s what we’re trying to answer.”

 

Source: BioSpace

 

The Denver And Colorado Springs Medical Office Building Market Is Vibrant And Growing

/in , , /by

The Colorado medical office building market comprises 23.9 million square feet of total space.

Of this amount, approximately 17.6 million sf, or 74%, is located within Colorado’s two largest core-based statistical areas, Denver and Colorado Springs. Inside these metros, the outpatient/MOB market is vibrant, growing and coveted by medical office investors.

The Denver MOB Market

The Denver MOB market contains 14 million sf of space across 275 MOBs that Revista tracks (7,500 sf and greater). Denver’s MOB market has been growing recently as more than 800,000 sf has delivered to the market during the past year. Despite inventory growth of 6% during the past year, the MOB occupancy rate has held steady and even risen in recent quarters. The MOB occupancy rate in Denver stands at 90.5% as of the second quarter of 2020 (Figure 1). This is up 20 basis points from first-quarter 2020 and up 10 bps from the second quarter of 2019. Overall, Denver’s MOB occupancy rate has performed quite admirably during the beginning stages of the COVID-19 pandemic.

The average triple-net MOB rent in Denver was $21.47 per sf in second-quarter 2020. Same-store rent growth was 3.5%, year over year. Denver’s same-store rent growth metric ranks 15th of the 125 CBSAs Revista tracks and compares to just 1.5% same store year-over-year rent growth for the aggregate top 50 CBSAs.

Overall, from both a supply/ demand perspective and a revenue or rent perspective, the Denver MOB market is strong and growing which makes it attractive for investors.

One form of investment in the market is through new construction. Denver currently has 574,000 sf of MOB construction in progress, which represents 4% construction vs. inventory. Fidelis Healthcare is developing a 100,000-sf MOB near the campus of SCL St. Joseph Hospital. The MOB is scheduled to be complete later this year. Synergy Medical Partners also is constructing a 100,000-sf MOB on the campus of Swedish Medical Center. The MOB also is scheduled to be complete this year and contains first floor retail.

Mortenson Development and Seavest Healthcare Properties are planning to build a 43,732-sf MOB in the fast-growing Candelas master planned community in Arvada. Mortensen and Seavest have been longtime investors in Colorado health care real estate.

The Colorado Springs MOB Market

The Colorado Springs MOB market contains 3.6 million sf of space, which makes it the 73rd largest MOB market Revista tracks. The Colorado Springs MOB market has not seen as much recent growth as Denver and just 72,000 sf has delivered in the past year. The Springs MOB occupancy has performed quite well recently and stands at 90% as of the second quarter. In fact, the lack of recent inventory growth has allowed the occupancy to climb from a low of 86.8% in the fourth quarter of 2018 to 90% in second quarter 2020 (Figure 2).

 

The average triple-net rent in Colorado Springs was $15.72 in the second quarter. Base rents for MOBs in the Springs range from $11.80 (10th percentile) to $24.01 (90th percentile), according to Revista’s metro report on Colorado Springs. Same-store year-over-year rent growth in the Springs was 2.7% in the second quarter, also above the 1.5% registered by the Top 50 CBSA benchmark.

Strong fundamentals are attracting new MOB development in the Springs. There is 360,000 sf of MOB space in progress across six projects in the Springs area. UCHealth has two projects under construction. It is building a 65,000-sf MOB next to Grandview Hospital. Scheduled to complete later this year, UCHealth will lease the project from MBRE Healthcare Real Estate. In addition, UCHealth is scheduled to break ground on the 120,000-sf Eastview Medical Center. This project is located on the east side of town and will contain an ambulatory surgery center, outpatient imaging, medical and surgical specialty services, an orthopedic center and outpatient rehabilitation, according to UCHealth.

The Colorado Medical Office Building Transaction Market

Attractive real estate fundamentals also can lead to a robust transaction market. Both Denver and Colorado Springs have seen strong MOB transaction activity recently.

In Denver, over $139 million worth of MOBs have traded hands during the past year. The current average price per square foot is $270 and the average trailing 12-month cap rate is 6.5% as of the second quarter (Figure 3). Notable recent trades in the Denver market include the sale-leaseback of the Southeast Pediatric Medical Center in Centennial to the Thompson Realty Group of Lincoln, Nebraska.

Healthcare Realty Trust paid $33 million in March for the Ridgeline Campus, located in Highlands Ranch. The Ridgeline Campus is a 137,000-sf MOB to which Children’s Hospital Colorado Pediatric Mental Health Institute recently moved.

In Colorado Springs, over $85 million worth of MOBs has traded during the past year. The average price per sf is $277 and the average TTM cap rate was 6.2 in second-quarter 2020 (Figure 3). A notable recent trade includes MBRE Healthcare’s $33.6 million purchase of the three-building, 149,428-sf Union Park Medical Campus. This was a high-profile trade that closed during the middle of the pandemic.

Overall, Denver and Colorado Springs are good examples of the attractiveness of the outpatient/MOB sector and its merits to investors and other stakeholders.

 

Source: Colorado Real Estate Journal