New Medical Office Building Pitched For West Orange County In Apopka

A new medical office building has been proposed for west Orange County.

Longwood-based Dafflyn Property 2 LLC plans to construct a new 11,500-square-foot medical office building at 2106 Plymouth Sorrento Road in Apopka on 1.31 acres, according to city documents. A project that size could cost $1.13 million to build, according to industry standards.

The property, which totals 8.95 acres, already has an Apopka Storage location that was built in 2021 on the site. The medical office building is slated to be built adjacent a 0.68-acre lot that would be preserved for future development. The project will go before Apopka’s development review committee on March 2.

Dafflyn Property 2 LLC bought the vacant site in March 2018 for $1.4 million from a trust, according to the Orange County Property Appraiser. The 2021 appraised value for the property is $1.21 million.

Representatives with the developer were not available for comment. The Dafflyn entity is managed by Central Florida dentists Dr. Robert Bliss, Dr. Bobby Garfinkel and Dr. Dennis Horanic.

Meanwhile, the medical office building market has remained steady during the Covid-19 pandemic. There is more than 16 million square feet of properties that include some sort of medical office under construction, according to CommercialEdge, which is part of Santa Barbara, California real estate data company Yardi Systems Inc.

The changing demographics of the U.S. also will create more medical office demand. About 12.8% of Apopka’s population is comprised of people age 65 and older, compared to 12.3% for Orange County.

By 2030, the U.S. is projected to have more people age 65 and older than those age 18 and younger, according to the Census Bureau.

“As the aging population seeks health services closer to home, we expect to see increased demand for medical office buildings in non-campus settings,” said a CommercialEdge report.

That demand could draw conversions for some suburban office buildings outside of health campus settings, but they would have to fit specific development standards when compared to regular office space, like improved HVAC and different ceiling heights.

 

Source: OBJ

8-Property Fresenius Medical Care Portfolio Trades Hands For $56.5 Million

An undisclosed buyer has acquired an eight-property single-tenant healthcare portfolio from Kingsbarn Realty Capital for $56.5 million.

Fresenius Medical Care occupies all eight of the properties, and the average remaining lease term is 10.4 years on the original 15-year leases. The eight properties total 94,000 square feet and are located in Texas, Virginia, New York, Ohio, Georgia, and Missouri.

Fresenius-occupied properties have been popular among single-tenant net lease investors. According to The Boulder Group’s Third Quarter Net Lease Research Report in 2021, Fresenius was among the single-tenant properties to experience the greatest amount of cap rate compression for new construction properties. 7-Eleven and AutoZone were also on the list. Overall, cap rates for retail, office and industrial fell to 5.80%, 6.80% and 6.70%, respectively, and pricing in the sector is at all-time highs.

SRS’ national net lease group managing principals Matthew Mousavi and Patrick Luther and first VP Stephen Sullivan brokered the eight-property sale, representing Kingsbarn, as well as 14 other Fresenius-occupied properties since September 2021.

Mousavi says that the deals show the strong investor appetite for healthcare real estate, which he expects to continue.

“We see this trend continuing due to continued demographic changes with an aging population, the appeal of medical as an e-commerce resistant product type, and the fact that these operators tend to be well capitalized with strong financial positions—allowing for a more efficient sale to the marketplace as well as the availability of attractive financing for investors,” Mousavi said in a statement about the sale.

Other deals involving Fresenius include White Oak Healthcare MOB REIT’s acquisition of a seven-property medical office portfolio last year. The seven assets are 100% leased by Fresenius and DaVita affiliates. They total 67,110 square feet and are located in five states.

Medical office deals have become so popular that some office owners are trying to sell office properties with any medical tenants as medical office to capture better pricing and more investor interest. Some properties with as little as 25% medical office are being marketed as healthcare, according to Jon Boyajian, a principal at Echo Real Estate Capital, a medical office expert. However, investors should be cautious. Converting office into medical is no easy task.

 

Source: GlobeSt.

Three Health Care Investment Trends For 2022

The healthcare sector was one of the beneficiaries of the pandemic, and the industry is rapidly growing.

As investors plan for 2022, Meridian CEO John Pollock is predicting three trends will drive activity healthcare real estate.

1. More Outpatient Facilities

The transition to outpatient facilities has been an ongoing trend over the last decade, and it accelerated during the pandemic.

“Services are migrating away from the acute care centers to more convenient outpatient centers” Pollock tells GlobeSt.com. “Ambulatory outpatient care facilities have been at the center of Meridian’s focus for years and we expect this trend to continue to accelerate and translate into more opportunities for investors, developers, and providers alike.”

2. Telehealth Gaining Momentum

Telehealth is the second major trend that Pollock sees gaining momentum this year.

“Everyone has read about the rapid adoption of telehealth during the pandemic. It certainly spiked in 2020, and while it has since leveled off, it is still an integral and effective means to deliver care,” Pollack says. “The physical manifestation of that trend is creating more flexible exam and telehealth rooms.”

The telehealth trend supports better patient care, especially as providers rush to build outpatient ambulatory facilities.

“We have seen an increasing need for outpatient ambulatory care centers either de novo or through renovations that require heavy lifting to meet the new care delivery models,” says Pollock. “A huge benefit of telehealth is providing greater access to care. During the pandemic, it provided a vital access point to care when physical appointments were not practical. Telehealth also allows patients in rural settings to have access to a specialist from the urban centers.”

3. A Focus On Behavioral Health

Finally, health care providers will increase focus on behavioral health.

“We are seeing numerous requirements,” says Pollock. “The stress, isolation and loss caused by the pandemic was the final straw and it is now widely known that behavioral health conditions impact one in four Americans.”

It isn’t only cultural changes that are driving activity in the behavioral space, but institutional investors are also backing these projects.

“Institutional investors have warmed up to having behavioral health tenants in their buildings and portfolios, and we have even seen cap rates move toward traditional medical office building valuations,” says Pollock. “It’s very exciting to be a part of creating more access to these much-needed services in our communities.”

 

Source: BenefitsPRO