What Is Fort Worth’s Medical Innovation District?

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A medical innovation district is planned for 1,200 acres south of downtown Fort Worth, with the hope of attracting healthcare business and serving as an innovation partner with the soon to open TCU and UNTHSC Medical School, Dallas Innovates reports.

(PHOTO CREDIT: Fort Worth Economic Development Department)

The area, called Near Southside, is already home to housing and restaurants as well as Cook Children’s Healthcare System, Texas Heath Harris Methodist, Baylor Scott & White, and Medical City Fort Worth.

The hope is for innovative healthcare businesses to collaborate with more established entities, which already employ 30,000 people in the healthcare industry in the area.

Modeled after similar districts in Oklahoma City and St. Louis, construction should be complete by this summer, and the city should officially designate the area in the fall, Dallas Innovates reports.

Learn more about Fort Worth’s medical innovation district here.

 

Source: D-CEO Healthcare

Medical Office Stays Strong In Major Healthcare Metros: 16% More Space Projected In Next Decade

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Driven by an aging US population, the amount of medical office space needed in the next decade is projected to be 16% more than today based on current trends, according to a report by CoStar.

That’s greater than the combined medical office space in New York, Los Angeles, Chicago and Dallas–Fort Worth, the nation’s four largest medical office markets.

This 22,654-square-foot medical office building is located at 9500 North Central Expressway.

Following this healthcare growth pattern, a 22,654-square-foot medical office building located at 9500 North Central Expressway currently houses DaVita Central Dallas Dialysis. Robert Lynn Investments recently purchased the asset and has a new long-term agreement with a national surgical company to anchor the building.

Robert Lynn Investments will develop the new space and expects it to be operational in the first quarter of 2020. The investment division of NAI Robert Lynn was opportunistic in purchasing the off-market value-add opportunity, which is consistent with its portfolio strategy.

NAI Robert Lynn brokers Nick Lee and Justin Utay sourced the building purchase and presented it to Robert Hoodis, Robert Lynn Investments managing partner. Lee and Utay also handled lease negotiations with the new tenant.

“This was a highly collaborative venture between Robert Lynn Investments and NAI Robert Lynn that enabled us to customize a solution to truly meet the client’s needs,” said Hoodis. “As an investment company, we benefit tremendously by accessing NAI Robert Lynn’s brokers’ submarket expertise. It’s a relationship that not only helps us source off-market deals, but often negotiate them to a better outcome for our clients and tenants. In this case, our team of Robert Lynn Investments and NAI Robert Lynn discovered a desirable new location that enables us to better serve our client with great benefits.”

The building spans 22,654 square feet, with the new tenant space to take up approximately 12,037 square feet. The remaining usable space, approximately 8,200 square feet, is occupied by DaVita.

The building includes covered parking for patients and is optimized for patient flow. The location is a short distance from Texas Health Presbyterian Hospital, numerous medical offices and major highways.

“The 9500 N. Central project fits perfectly within Robert Lynn Investment’s portfolio strategy, which includes medical office buildings, surgical hospitals and surgery centers throughout the country,” Hoodis tells GlobeSt.com. “While we have built our portfolio primarily through acquisition, we have seen a recent increase in development opportunities. We consider the 9500 N. Central property a hybrid opportunity as an acquisition that includes a significant development component. The scope of this project requires us to take shell space and develop it into a full surgery center. In addition to 9500, we are currently working on several development projects, including the expansion of an existing surgery center and a large ground-up medical office project.”

 

Source: GlobeSt.

Investor Demand For Medical Office Buildings Has Gone Global

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Demand for medical office properties is so strong, even foreign investors alien to the American healthcare system are shopping for them

“Investors from Singapore and Australia are shifting capital to the U.S. to invest in medical real estate,” CBRE Vice Chairman Lee Asher said during Bisnow’s Atlanta State of Healthcare event last week.

But as they come, Asher said he is spending more time educating foreign investors on the ins and outs of the American healthcare system.

“The foreign capital, it takes them about two years to understand how healthcare works in the U.S.,” Asher said. “There’s plenty of new capital, but the key is they need domestic operating players.”

Asher was among medical real estate experts at the event who discussed a wide range of topics affecting the industry, from the surge of new medical office construction and the merger mania occurring within the healthcare industry to the effects of the possible dismantling of Georgia’s certificate of need system.

Of course, foreign players are only a portion of the investors seeking stakes in medical office real estate. But increasing revenues, merger and acquisition activity and overall health system growth has been attracting investors from Asia, Europe, the Middle East and even Africa and Latin America, Modern Healthcare recently reported.

According to a 2019 Marcus & Millichap report, medical office sales had their largest growth in transaction velocity, at 13%, since 2015, nearly double the rate compared to other commercial property investments.

“Hospital-affiliated facilities and outpatient surgery centers with long leases and annual rent increases are most desirable, with initial returns ranging in the mid-5% to 7% span,” Marcus & Millichap officials said in the report.

Part of medical office’s attraction is its stability. Panelists said during the Great Recession, those investments largely remained untouched by the overall real estate malaise. Investors today see the sector as one of the best to weather economic downturns, especially as baby boomers age and require more healthcare.

“Also, many of the tenants — especially tenants with lots of medical equipment, like imaging groups or cancer treatment centers — book long leases and rarely, if ever, undergo the headaches of a relocation,” MB Real Estate Services Senior Vice President Brian Burks said.

Ackerman & Co. President Kris Miller said when his firm first started to develop medical office campuses more than two decades ago, it required a significant amount of personal capital and hard work to find investors. Today, the story is completely different.

“We all know racetracks make money, but it’s hard to find a banker who is going to finance one, and that was true with medical office,” Miller said. “There are just so many people who want to buy this right now. We can sell every medical office asset we stabilize, and we can sell that asset 10 times at roughly the same price.”

“Construction costs are complicating the growth of physicians and hospital groups. Even with developers willing to capitalize and build new medical facilities for tenants, the groups still need to have the financial wherewithal to handle the higher rents,” HealthAmerica Realty Group CEO Tommy Tift said. “That is probably our biggest challenge, and also that will be physicians’ … biggest challenge.”

 

Source: Bisnow