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Newmark Arranges $300 Million Joint Venture With Catalyst Healthcare Real Estate And Heitman To Fund MOB And IRF Development Pipeline

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Catalyst and Heitman have entered a joint venture to develop a national portfolio of healthcare properties, including both medical outpatient buildings, orthopedic centers of excellence, and inpatient rehabilitation facilities. The venture will start by funding the development of seven, ground-up or in-process developments–totaling nearly 500,000 square feet, spanning five states and encompassing blue chip tenants.

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Baptist Health Care’s $650-million Pensacola Hospital To Open In The Fall

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In a recent interview with Florida Trend, Mark Faulkner, president and CEO of Baptist Health Care, talked about BHC’s $650-million hospital and 57-acre campus in Pensacola set to open in September.

CHALLENGES: “We broke ground on this project a few weeks after Hurricane Sally hit Pensacola hard in 2020 and also while in the midst of a pandemic. And yet we have remained on our original construction schedule for an opening on Sept. 23, 2023.

It’s been my experience in this project and others we’ve undertaken that challenges such as these bring out the best in people, especially high performers. And I think the challenges we’ve faced during the past two years have made us a better organization and, in a way, helped to re-create ourselves to better serve a rapidly evolving community.”

CHANGES: “Our original plan was to leave the top floor unfinished until our patient growth reached a point where we would need those additional beds. At the time we were projecting a modest annual patient growth of 2.5%. But what we have experienced since then is patient growth far exceeding those projections. We realized we faced the risk of moving into a new hospital facility that would be already very full. Fortunately, we were not too far into the project to make the call to move forward with finishing the construction of the 10th floor that will give us additional general medical surgical beds.”

FUTURE: “We’re working with Pensacola-based Catalyst Healthcare Real Estate to develop a medical office building on our new campus. It would be essentially a master lease where we own the property and Catalyst would construct the building. Catalyst CEO Chad Henderson is surveying the market to see what the future demand is for new office medical space in Pensacola. We don’t know how it’s going to end up looking, whether it’s going to be a larger or smaller project, but we should know pretty soon what his analysis is.”

 

Source: Florida Trend

Encouraging Signs For MOB Development

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Since the onset of the COVID-19 pandemic, most health systems have been forced to put most their efforts into surviving the crisis, leaving little time to think about growing their ambulatory networks and initiating new medical office building (MOB) development projects.

In recent weeks, however, with the opening up of non-elective surgeries in most states, there are reports that this could be changing.

According to Ben Ochs, CEO and managing partner of one of the healthcare real estate (HRE) sector’s most-active development firms in recent years, Media, Pa.-based Anchor Health Properties, requests for proposals (RFPs) from the health systems are starting to resurface.

“Instead of actively pursuing development deals with health systems during the throes of the pandemic and knocking on their doors, Anchor has been, for the most part, waiting for the health systems to be the initiators,” Ochs noted. “That said, we have seen a number of system-sponsored RFPs come out … and I think at last count we’re in the middle of responding to about four, right now, which I think is a very positive sign.”

Mr. Ochs was one of three panelists to take part in a June 10 HRE webinar titled, “State of the Industry: What’s the Outlook for 2020 from an Investment, Development and Leasing/Operations Perspective?”

The two-part online event, sponsored by Atlanta-based InterFace Conference Group, began with a panel discussion on investment. That was followed by a session on development that featured Mr. Ochs, along with Mark Davis of longtime Minneapolis-based HRE development firm Davis, and Chad Henderson of Pensacola, Fla.-based Catalyst Healthcare Real Estate (HRE). HREI™ Publisher Murray W. Wolf moderated the development discussion.

 

Source: HREI