Lucky’s Market Site In Florida Up For Grabs For Medical Or Grocery Space

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Reports that Lucky’s Market is shutting down almost all of its Florida grocery stores leaves the one under construction in Cape Coral in limbo.

Of the 12 existing Lucky’s Markets in Florida, only the one in Melbourne will remain operational, the Sun-Sentinel reported. Employees at the two Lucky’s Market locations in Naples were told their stores are closing.

The Lucky’s Market construction site in Cape Coral, which took more than a decade to assemble by local developer Dan Creighton, is not quite half-finished.

Creighton, who was traveling with limited phone and internet access, released a statement through Priority Marketing: “As representatives for SB-VETS-1 LLC, which serves as the landlord of this property, we are not privy to Lucky’s Market’s next steps at this point and have no additional information beyond what has already been shared publicly We are hopeful the next tenant for this site will be another excellent fit for the Cape Coral community.”

Work on the Lucky’s Market in Cape Coral has halted as the grocery chain is backing out of Florida. The building was to be completed by June but is now in limbo off Veterans Parkway and Santa Barbara Boulevard. (PHOTO CREDIT: David Dorsey)

Walls are already up on what was planned to be the 30,000-square-foot Lucky’s at the southeast corner of Veterans Parkway and Santa Barbara Boulevard. The store shell is flanked by a still-under-construction Wawa gas station and convenience store, Aspen Dental, other businesses and a new and open Burger King that are accessible from Santa Barbara.

Creighton celebrated the groundbreaking in September with city dignitaries on hand. He said then the construction would be targeted for completion by June of this year.

This marks the second time in two years a major chain has announced plans to open a grocery in Cape Coral only to back out. Fresh Market announced plans to build a store in Coralwood Mall. It backed out and Aldi has taken its place there. And now Lucky’s Market remains in limbo.

“One does not have to do with the other,” said Gary Tasman, CEO of Cushman & Wakefield in Fort Myers. About a month ago, Kroger backed out of financing Lucky’s Market, which put the store in financial jeopardy. Lucky’s has been looking for a replacement partner,” Tasman said of the chain that began by a husband and wife in Boulder, Colorado. “And it’s my understanding they haven’t been able to find one. That’s why you’re seeing them retreat on their growth. Everything I’ve seen in the Cape justifies the need for additional grocers in Cape Coral based on the growth and sales and all that. But that internal partnership, it just for whatever reason separated out. The financial capacity just wasn’t there to execute it.”

Tasman said he did not know the scenarios surrounding the Cape Coral property and construction site. But he hoped for the best for Creighton, who should be able to find a solution in the long-term for what has been yet another speed bump.

“I don’t know his deal,” Tasman said of Creighton. “I can’t speak to it. But I know Dan Creighton is a very smart, astute businessman. I just have to believe he built certain protections for himself. My hope for Dan is that he is adequately protected. The risk he was willing to take to do that deal was commensurate with the risk that he was willing to take and gain on the upside and protecting him on the downside.”

As for the site’s future, Tasman speculated that another chain like Trader Joe’s or Sprouts could look at the site. Or he could see it as a medical-related space or a big-box store.

“You know, that’s a hard one right now,” Tasman said. “I’m not sure it would be retail. There’s definitely a demand for a grocer in that spot. It could also be medical. I do believe it will be backfilled into something else. If the footprint works for other concepts, frankly I think medical is a great use for it. It’s a great location. I think you’re going to see medical or a big-box retailer.”

 

Source: News-Press

Orlando Health To Buy Land Near Lakeland For Medical Campus, Hotel, And More

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Orlando Health has a contract to buy about 80 acres on the south side of Lakeland for a potential future medical campus that eventually will include up to a 360-bed hospital.

It also will feature medical office space, a small hotel and limited supporting retail, which will be built out in phases as part of a long-term plan.

Executives with the nonprofit health care organization and network of community-based hospitals said plans for the property, the first phase of which is not expected to be built for several years, are still under development, and Orlando Health will research and seek community input to ensure the eventual Orlando Health Lakeland Health & Wellness campus meets the needs of Lakeland and nearby communities in Polk County.

“Serving Polk County has been a part of our long-term growth plan for years,” said Matt Taylor, vice president of asset strategy with Orlando Health, in a prepared statement.

Sanlan RV & Golf Resort Inc. owner Edward Holloway is the seller of the vacant property that’s in an unincorporated part of the county, just south of the Polk Parkway on the east side of Lakeland Highlands Road. Orlando Health has applied for annexation of the land by the city and for changes to the comprehensive land-use plan and zoning. While Orlando Health executives do not expect traffic associated with the project to significantly impact the area, a new traffic study will be part of the process.

“Our planning is in the very early stages,” said Taylor. “We intend to take our time and be very thoughtful. We will become involved in the community at different levels, including community meetings, civic groups and a public website. When we are ready to move forward, we want to ensure we are meeting the needs of the community.”

 Orlando Health, AdventHealth and Nashville, Tennessee-based HCA Healthcare Inc. (NYSE: HCA) all have projects that are part of $525.1 million in facilities that will be completed this year.

Expansion projects like the new hospitals — which create temporary construction positions and full-time medical jobs — allow health care facilities to expand into new territories where they don’t already offer services. Meanwhile, area hospitals also are wrapping up construction work on new medical office buildings, freestanding emergency rooms and expansions to their current facilities that add beds or other services.

Orlando Health is a $3.8 billion health care organization with hospitals, physician practices and outpatient care centers across Central Florida. The organization is home to the area’s only Level One Trauma Centers for adults and pediatrics, and it is a teaching hospital system. More than 3,100 physicians have privileges across the system, which is also one of the area’s largest employers with more than 20,200 employees who serve more than 167,000 inpatients, more than 2.7 million outpatients, and more than 20,000 international patients each year.

Central Florida expansion is the name of the game for hospital companies in 2020. Click here for the Orlando Business Journal slideshow ‘14 Central Florida Medical Projects Set To Open In 2020‘.

 

Source: Orlando Business Journal

The Dallas-Fort Worth Market: When Physician Real Estate Owners Should Buy And Sell

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Dallas-Fort Worth is a unique market for physician real estate owners.

The city’s growing population affords the benefits of a primary market, allowing a practice to operate in a large medical office building in a densely populated area alongside a major freeway all while creating synergies with neighboring providers.

However, given Dallas-Fort Worth is less dense than other major metropolitan areas like San Francisco, Los Angeles, and New York, providers here have a unique opportunity.  Physician groups can actually build their own facility at a reasonable price, allowing them to offer comprehensive services under one roof, providing a more convenient and cost-effective experience for patients.

Many physicians develop their own facility because it allows them to control their destiny, manage their occupancy cost, and become a real estate investor.  Frequently, physicians focus solely on the benefits of flexibility, pride of ownership, and long-term monthly cash flow and haven’t yet determined their long-term strategy for one of their largest investments.

Over the next decade we’ll see many physicians looking towards retirement. With 43% of physicians over the age of 55, near term turnover is imminent. That number is even higher for specialist providers such as Orthopods (52%), Urologists (48%), and Ophthalmologists (48%). Considering 75% of physician-owned practices have just 1-20 providers, physician turnover can have a major impact on a practice. But what does that mean for the real estate?

For many homeowners, if you want to move, you vacate your home and likely sell it for an appreciated value. For many small business owners, you lease from a landlord and operate under a short-term lease. For many commercial business owners, even if you retire, you still maintain equity in the business, which also owns the real estate.

Physician-owned clinical real estate is different. Most commonly, the practice and real estate entities are composed of different partners. If a health system buys your practice, they have little interest in buying your real estate. If a young physician joins your practice, they may not have the financial capability or desire to buy into the real estate, especially with medical school debt at an all-time high. Unlike other businesses where retired owners maintain some equity, if a physician retires, his ownership is liquidated and redistributed to existing or incoming partners.

Let’s say you retired and still own the real estate; you’re no longer in control of your tenant. The practice may continue to operate there, but likely under a short-term lease to maintain flexibility.  If the practice vacates your building, you’re stuck trying to sell a large special-purpose facility.  Most office users don’t need a 20,000 SF facility with a large waiting area and layout suited to delivering healthcare services.

In Dallas-Fort Worth, the current average sale price for vacant medical office buildings between 10,000 and 50,000 square feet is $93 per square foot, and that’s after being on the market ten and a half months. To put this in perspective, the cost to construct a new medical office building can range between $150-$250 per square foot, and the average value of medical office properties structured as investment sales is $299 per square foot.

Based on the numbers, it’s apparent that the best time to sell your real estate is while you remain operating in it, thus positioning it as an investment sale. For owner-occupiers like physician practices, this transaction is known as a sale-leaseback. A sale-leaseback is simply a real estate sale simultaneous with executing a new long-term lease. In this type of transaction, the real estate is often sold to a 3rd party institutional investor seeking a stream of consistent rental cashflow.  Instead of paying rent to yourself, the practice now pays rent to a third-party landlord.

“Even if a real estate sale doesn’t meet your current objectives, addressing potential partnership challenges early will maximize the value and security of your investment.” points out Collin Hart, CEO & Managing Director of ERE Healthcare Real Estate Advisors.

At first, a sale-leaseback may sound similar to a reverse mortgage or a loan. While it’s not quite that, it’s certainly an alternative finance structure.  These sales are commonly used by larger corporations as a way to free up capital for investment in other areas, without carrying debt on their balance sheet. However, for many physician-owned practices, this model can be used strategically. A sale and leaseback gives physicians the ability to cash out of their real estate at a peak in the market.

At the same time, this type of sale solves challenges related to partnership structuring, recruitment, turnover, and succession planning.  With demand for healthcare real estate investments on the rise, these transactions can be structured with limited personal liability, providing flexibility for retirement during the term of the lease, without financial exposure.

Over the last few decades, owning a medical facility has given physicians flexibility; however, divesting of real estate can create opportunities for the future.

 

Source: D CEO Healthcare Magazine