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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

Influx Of Capital Into Medical Real Estate Creating New Competition For Established Players

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Growing demand for healthcare services has created a booming market for medical office buildings, bringing a host of new investors into the space and making it more challenging for the sector’s traditional players.

Anchor Health Properties Executive Vice President Katie Jacoby, whose company has been developing medical facilities for over 30 years, said she is seeing a surge of private equity competing for healthcare real estate deals.

“Ten years ago, healthcare was hardly even considered an asset class; now it’s one of the top asset classes,” said Jacoby, who will speak April 11 at Bisnow’s National Healthcare Mid-Atlantic event in D.C. “There is increased competition to purchase properties and to develop properties.”

Flagship Healthcare Properties Executive Vice President Gordon Soderlund, whose firm has been developing medical real estate since the 1980s, is also seeing more private equity firms and REITs making big investments in the healthcare space.

“There’s a lot of competition pursuing development,” Soderlund said. “Our returns on costs are being driven down because there are plenty of players to respond to an RFP … It’s even more competitive on the acquisition side. There’s so much capital chasing medical real estate right now.”

Nationwide transaction volume in healthcare real estate reached a new record in 2017, according to JLL’s 2018 Healthcare Real Estate Outlook, with a significant portion of the growth in the medical office building sector. The JLL report also found the sources of capital investing in medical office buildings are expanding. In 2017, 19% of MOBs were owned by private investors, 11% by REITs and the remaining 70% by healthcare providers, the traditionally dominant owners in the space.

The growing investment in medical real estate comes as the United States’ aging population is creating more demand for healthcare services. The number of people 65 years and older will nearly double by 2050, according to JLL‘s report, and those over 65 spend five times more on annual medical expenses.

“People see it as a stable asset class,” Jacoby said. “Everyone sees it . They have aging parents themselves … They can experience it on their own personal level.”

The types of tenants occupying medical office buildings is also evolving toward more stable operators, giving investors more confidence in the properties.  As recently as five years ago, the most common tenant in an MOB was a physician with a private practice in 3K SF to 5K SF.

“But individual private practices are less common today, with physicians being employed by health systems or forming groups of doctors,” Jacoby said. “A lot of these private doctors are now employed by the health system. If they’re not employed by a health system, consolidations of physician practices into larger conglomerates are allowing them to serve as anchor tenants similar to a health system.”

Soderlund also said he’s seeing physicians being acquired by health systems and consolidating to lease larger blocks of office space, a trend he views as a positive for landlords.

“One day we might be leasing office space to a six-physician practice, and once they’re acquired our lessee is now an investment-graded hospital system,” Soderland said. “From a credit perspective, that’s great. With more large tenants occupying medical office buildings, more investors are interested in buying the properties.

“Hospitals are consolidating, making them stronger, creditworthy tenants,” Jacoby said. “I think that makes it more attractive for other investors that have traditionally invested in other asset classes.”

Jacoby and Soderlund will discuss trends in the medical real estate industry April 11 at Bisnow’s full-day National Healthcare Mid-Atlantic event at the Washington Marriott Georgetown.

 

Source: Bisnow

Baptist Health South Florida Buys Coral Gables Development Property Site

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Baptist Health South Florida has acquired a development site in Coral Gables from an entity co-owned by Ugo Colombo of CMC Group and Masoud Shojaee of Shoma Group, according to multiple sources familiar with the deal.

The 2.8-acre site at 250 Bird Road in Coral Gables was sold to Baptist Health South Florida (PHOTO CREDIT: Avison Young)

The price for the 2.8-acre site at 4112 Aurora St. and 250 Bird Road was not yet recorded in county records. One source with knowledge of the deal said the price was around $37 million.

The seller, Coral Gables Luxury Holdings, was represented by Avison Young. Baptist Health, the largest hospital operator in South Florida, has its administrative building nearby. It also owns a hospital in Coral Gables.

 

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