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5 Of The 20 Largest Medical Office Deliveries Expected This Year Are In One City

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A new report indicates Houston’s medical office market absorbed almost 40K SF in Q1, and more growth is coming, with the city poised to be home to five of the 20 largest medical office projects set to deliver this year across the nation.

Overall medical office leasing increased 26.4% year-over-year, according to JLL’s Medical Office Building Insight report that was just released. Additions to the market include the Hope Health Clinic’s 70K SF flagship location in Sugar Land and Orion Medical Group’s 47K SF building in Clear Lake.

Another 606K SF is under construction, according to the JLL report. Q2 is set to bring the delivery of the largest medical office building project in the country this year, per 42Floors.

A 400K SF, $1.3B project is the O’Quinn Medical Tower at the McNair Campus of Baylor St. Luke’s Medical Center, Houston Innovation Map reported. The 12-story building will include an ambulatory surgical center with 12 operating rooms and 10 endoscopy suites, an 80-bay setup for infusion therapy, more than 70 exam rooms and more than 850 parking spaces, the article states.

Four other Houston projects made 42Floor’s national top 20 list. Two of them are Kelsey-Seybold projects slated to deliver in Q3: a 158K SF center on the North Grand Parkway and a 116K SF ambulatory surgical center in Clear Lake. The other two projects listed are the 159K SF Houston Methodist Sugar Land Hospital Medical Office Building 4 and the 107K SF 1715 Project in Friendswood.

Houston offers the highest concentration of medical office building projects of any metro on the 42Floors list. That designation comes as healthcare systems like Houston Methodist and Memorial Hermann continue to expand their operations to match population increases, leading to sustained growth in the medical office market, JLL’s report states.

Other trends seen in Q1 include the popularity of Class-A medical office space, reflecting the flight to quality seen across the entire office sector. The absorption for Class-A medical office totaled about 50K SF while Class-B’s was -10K SF, balancing out to the nearly 40K SF total absorption.

Sugar Land and Clear Lake continue to show themselves as strong suburban markets for the medical office building market development, totaling over 2M SF and 1.75M SF of inventory, respectively.

The Woodlands, which is looking to become a hub for the life sciences industry, has 2.52M SF of medical office building inventory, according to the JLL report.

“Houston’s medical industry is propping up its potential to draw life sciences business,” Matt Gardner, leader of CBRE’s Americas life sciences advisory group, told Bisnow. “For decades, the pieces have been there. I think the sense around the world in the industry is that it’s starting to come together now. And it’s starting to show up for more of the growth that we’ve been hoping for for a long time.”

 

Source: Bisnow

Medical City Frisco’s Newest Addition

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Medical City Frisco plans to build a $91 million patient building that will add 36 patient care beds to the hospital.

The building will add 118,481 square feet to the facility, bringing the facility’s total bed count to 97. It will have an entrance on Frisco’s Main Street and is being constructed to allow for natural light and include comfortable furnishings, large patient rooms, a spacious waiting area, and 300 parking spaces. Construction is scheduled to be completed in December 2022.

The development is part of Medical City Healthcare’s five-year, $1.1 billion investment in expanding hospitals, adding service lines, building new facilities, and advancing technology systemwide. It comes on the heels of another recent renovation at its Frisco hospital.

Prior to the pandemic, Medical City Healthcare’s  Frisco hospital saw 3,900 admissions and 15,000 emergency room visits. The hospital now has 11 operating rooms, a biplane cardiac catheterization lab, 61 patient rooms, and office space, following the completion of a $54 million, 150,000 square-foot medical office building that opened in June.

The hospital’s growth has mirrored the larger community. Over the last 10 years, Frisco has grown over 70 percent, outpacing any other city in the nation. The city’s population is more than 200,000 people in 2020, an increase from the roughly 117,000 people reported in 2010. It has been ranked America’s fastest growing city and No. 1 in job growth at different points throughout the last decade.

Most of the major health systems have built hospitals along the Dallas North Tollway in Frisco, including Texas Health, Baylor Scott & White, Scottish Rite, Children’s Health, Cook Children’s, and UT Southwestern.

“We are proud to be part of, and continue to invest in, the Frisco community, which continues to grow at a phenomenal pace,” said Patrick Rohan, CEO of Medical City Frisco via release. “Anticipating future community needs helps keep our neighbors healthy and advances our mission to the care and improvement of human life.”

Source: D Magazine

Healthcare Professionals, Investors Key In On Dallas-Fort Worth

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Dentists, optometrists, physicians and even veterinarians are opening practices in Dallas-Fort Worth at a rapid rate.

Among metropolitan areas, Dallas-Fort Worth-Arlington experienced the largest numeric growth not only from 2017 to 2018 (131,767) but also from 2010 to 2018 (1.11 million).

Dallas and Fort Worth are now the ninth and 13th most populous US cities. The 2018 total populations were 1.345 million and 895,008 respectively.

Migration, both domestic and international, as well as natural influx contributed to the growth in each of these areas, with natural increases serving as the largest source of population growth in Dallas and domestic migration serving as the largest source in Phoenix, according to the US Census Bureau.

Tarrant County was ranked eighth from 2017 to 2018 (27,463) and sixth from 2010 to 2018 (274,276) among cities including Arlington, Fort Worth and Grand Prairie. Fort Worth was ranked third among the top 15 cities with populations of 50,000 or more that had the largest numeric increase from 2017 to 2018 (19,552), according to Xite Realty.

Collin County experienced the fourth largest numeric growth from 2017 to 2018 (33,753) nationwide. Cities in Collin County include Allen, Carrollton, Frisco, McKinney, Plano and Richardson. Frisco and McKinney were ranked 10th and 13th respectively among the top 15 cities with populations of 50,000 or more that had the largest numeric increase from 2017 to 2018, says Xite.

With healthcare demand creating added opportunities, investors are clamoring to get in on the action. And late last month, HR Acquisition of San Antonio Ltd. did just that with its purchase of Magnolia Medical Tower in Fort Worth for an undisclosed price.

Private real estate investment firm Ridgeline Capital Partners purchased the 89,990-square-foot medical office building located in the Fort Worth Medical District three years ago. Ridgeline renovated the lobby and common areas in 2017, helping to increase its occupancy and rental rates.

The six-story building was built in 1985 and is located adjacent to the Baylor All Saints Medical Center, with access to Cook Children’s Medical Center, Texas Health Harris Methodist Hospital Fort Worth and Plaza Medical Center of Fort Worth. The building has a well-rounded tenant mix including primary care, oncology, orthopedics, cardiology, urology, OB/GYN, neurology and pain management.

“The building has no use restrictions while offering a lower rent than other on-campus MOBs in the area,” Jeff Axley, Ridgeline’s managing principal, tells GlobeSt.com.

JLL’s Healthcare Capital Markets Group brokered the sale on behalf of Ridgeline.

“This property is very well-situated in the Fort Worth Medical District, and we hope the new owners continue to enjoy the success we have experienced,” Axley says.

 

Source: GlobeSt.