Spec Medical Office, Retail Project In The Works Near Downtown Orlando

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Amid an uncertain market for office space, a 60,000-square-foot spec project is set to break ground in the SoDo neighborhood near downtown Orlando.

Josh Smith, vice president and managing director for the Orlando office of Birmingham, Alabama-based Harbert Realty, told Orlando Business Journal that ground will break on the South Orange Medical Complex on July 12.

Smith is marketing the property for leasing on behalf of the owner and developer, South Orange Medical Complex Inc., and said the project, located at 2116 S. Orange Ave., will consist largely of medical office space, a use that has fared better than typical office space during the pandemic.

What do we know about the project?

The complex will include a three-story building with an adjoining parking garage. Each floor will include roughly 18,000 square feet of space that can be utilized by a single user or divided up for multiple users, Smith said.

The first floor is intended as retail or restaurant use, though it could also become a more public-facing medical concept.

Though being built on a spec basis, there are several proposals for the space, Smith told OBJ. The adjoining garage and the built-in parking it provides is particularly enticing for potential tenants, he said.

Smith declined to cite an estimated project cost, but based on construction industry standards it could cost $10.7 million.

The developer and owner of the parcels where the project will rise is South Orange Medical Complex Inc., an entity related to DeLand-based physician Hussain Rawji. Rawji acquired the land fronting Orange Avenue in 1998 for $525,000, Orange County records show, and the land on W. Harding Street for $110,000 in 2015.

Winter Garden-based Schmid Construction Inc. is the general contractor for the complex and Daniel Farmer, of Orlando-based Farmer Architecture, is architect.

Plans for the complex date back at least as far as March 2020, though the project has changed since then. It is just south of the intersection of Kaley Street and Orange Avenue, about a half-mile south of the Orlando Health Regional Medical Center campus.

Because of its location, and planned use, Smith said he felt confident encouraging Rawji to press forward with his long-sought project.

“In spite of everything that’s been going on with office space in general since Covid, Dr. Rawji has pressed forward with this vision, because it’s his passion,” Smith said. “This is probably one of the most appropriate developments in Orlando, given the actual location of the real estate. … You’re in a very particular stretch of road where you’re very well insulated from what the rest of the economy and the market is doing.”

 

Source:  OBJ

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$45.5M Off-Market Sale Highlights Demand For Medical Office Space

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Colliers and Avison Young closed on the sale of Crossroads III, a suburban Class A medical office building located at 8100 SW 10th Street in Plantation.

Executive Managing Director Mark M. Rubin, Director Bastian Laggerbauer, and Financial Analyst Jake Stauber of the Colliers South Florida Investment Services Team collaborated with Justin Cope and Greg Martin of Avison Young in representing the buyer, Anchor Health Properties.

The off-market transaction totaled $45.5 million or $475 psf.

“The South Florida market continues to thrive and see high demand for medical office properties with strong tenancy,” said Rubin. “In this highly competitive market, we’re pleased to have assisted our client within a short timeframe in acquiring a high-quality asset that will complement their existing national portfolio.”

The medical office building is leased long-term to the University of Miami (UM) Hospital. The University of Miami Health System focuses on delivering leading-edge patient care by the region’s best doctors, powered by groundbreaking research and medical education. UM plans to expand to the entire property and add a state-of-the-art 15,000-square-foot radiotherapy center.

“This was a prime opportunity for the buyers to acquire a class A medical office asset leased by a credit long-term tenant, off-market, prior to the asset being widely marketed,” said Laggerbauer. “The buyer already owns another asset leased by UM.”

Anchor Health Properties is a national full-service healthcare real estate company focused exclusively on medical facilities. The Virginia-based company fosters strong programmatic relationships within healthcare, real estate, and finance with more than $1 billion of completed development projects, more than 7.5 million square feet under management, and more than $2 billion invested in stabilized healthcare facilities.

Plantation is home to some of the leading healthcare and medical office tenants in South Florida, including the University of Miami Health System, Sunshine State Health, Humana, Aetna, and Masa Global. Broward County, mainly Plantation, is an attractive investment market due to its proximity to dense residential neighborhoods, corporate campuses, and hospitals such as Plantation General Hospital, Mercy Hospital, Memorial Hospital, and HCA Florida University Hospital, all within an 8-mile radius of the city.

Limited medical office construction continues to keep the supply tight and rents competitive, currently at $32.28 per square foot gross. Demand for medical office space has been elevated since the pandemic’s start as the product type proved to be resilient, high-yielding, and recession-proof. The outlook for medical offices remains positive as the healthcare needs in South Florida continue to expand in line with population growth.

 

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Flagship Healthcare Trust Acquires Clermont MOB

Citrus Tower medical office building in Clermont, Florida

Flagship Healthcare Trust, a Charlotte-based outpatient healthcare real estate investment trust (REIT), has acquired the Citrus Tower medical office building (MOB) in Clermont, Florida.

Located at the Citrus Tower Boulevard and Johns Lake Road intersection, the 20,964-square-foot, Class A property serves as the anchor building for Citrus Tower Park and is home to the newest location for IMA Medical Group (IMA), the area’s leader in patient-centered care for wellness and preventative medicine. The MOB is approximately 1.5 miles from the 170-bed Orlando Health South Lake Hospital and AdventHealth Clermont Park, a 24-bed freestanding Emergency Department and health park.

Clermont is a suburb of Orlando, one of central Florida’s fastest-growing cities and a thriving healthcare sector. The region is home to three other hospitals in addition to Orlando Health South Lake and AdventHealth: Nemours Children’s Hospital, Orlando VA Medical Center, and HCA – Central Florida Regional Hospital.

“This property is well-positioned in the Orlando MSA, close to two major hospitals and with excellent access to commercial and transportation corridors. The newly constructed Citrus Tower MOB will be an attractive option for medical practices in this dynamic and rapidly growing market,” said Gerald Quattlebaum, Flagship’s Executive Vice President of Acquisitions. “We look forward to complementing the existing tenant mix all the while providing first-class real estate services that support their missions and business aspirations.”

Flagship Healthcare Properties, which serves as the external manager for the REIT, will provide asset management and property management services for the property. The team at Fifth Third Bank, led by Michael Perillo, will provide financing for this off-market transaction.

 

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Medical Office, Hospital Expansions Among Orlando’s Largest Proposed Health Projects This Year

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There’s no lack of health care projects in Orlando so far in the first six months of 2022 — bringing more construction and jobs into the area.

Major care systems like AdventHealth and Orlando Health are finishing up respective projects estimated in the millions of dollars.

For example, Orlando Health has plans to wrap up its $341 million, 370,000-square-foot Orlando Health Jewett Orthopedic Center during 2023. Also, Altamonte Springs-based AdventHealth is finishing its 12-story, 300,000-square-foot Innovation Tower medical office building in downtown Orlando later this year and is preparing a new freestanding emergency department and medical office on the former site of The Holy Land Experience in Orlando’s Millenia neighborhood.

Nationally, the activity is following the same trend. Raleigh, North Carolina-based FMI Corp. expects health care construction spending in the U.S. to go from $53 billion in 2022 to $62 billion in 2025. That is due to demand for services for an aging population and the addition of people to certain parts of the country.

Jeff Butler, senior pre-construction manager in Florida for Birmingham, Alabama-based Robins & Morton, previously told Orlando Business Journal his company has seen a lot of local health care systems and companies invest in facilities due to the area’s population growth and other factors.

“We are seeing more health systems add capacity to their hospital campuses, from inpatient beds to emergency, imaging and specialty care services,” Butler said. “We believe some of this is a response to the lack of bed availability throughout the Covid pandemic, but we also believe it’s a reaction to aging infrastructure.”

Here are some of the largest health care projects proposed so far in metro Orlando:

Healthcare Trust of America Olympus medical office

  • Cost: Estimated at $100 million
  • Description: Healthcare Trust of America (NYSE: HTA) has proposed 175,000 square feet of space, including a 96,000-square-foot building in the first phase inside the Olympus mixed-use development in Clermont. The Scottsdale, Arizona-based company is targeting the start of construction either this December or January 2023.

AdventHealth’s two new medical office buildings

  • Cost: Roughly $30 million each, $60 million total
  • Description: AdventHealth will open a new three-story, 58,000-square-foot medical office building with an outpatient surgical center at 950 Rinehart Road in Lake Mary early next year and a new two-story, 36,000-square-foot medical office building will open at 5821 S. Williamson Blvd. in Port Orange in October. Both projects are located next to existing freestanding emergency rooms.

HCA Florida Poinciana Hospital expansion

  • Cost: $9.9 million
  • Description: HCA will build out 13,000 square feet of shell space in the hospital, expanding the hospital’s intensive care unit capacity from six to 12 bed and adding 18 inpatient beds to reach a total of 94. The project is expected to wrap up in spring 2023 after starting construction in May.

Orlando Health Center for Rehabilitation conversion

  • Cost: Not listed
  • Description: Orlando Health is establishing its first rehabilitation hospital in the region by converting the Orlando Health Center for Rehabilitation on the campus of Orlando Health – Health Central Hospital in Ocoee into a 54-bed inpatient facility. The hospital will have room to expand up to 100 beds in the future and is expected to start taking patients in 2023.

HCA Healthcare Inc.’s new Lee Vista emergency room

  • Cost: Not listed
  • Description: The Nashville, Tennessee-based (NYSE: HCA) health system filed plans with the city of Orlando for a 10,860-square-foot, one-story freestanding ER at 5597 Lee Vista Blvd. in Orlando, where it has a ground lease. A timetable for the facility to be built has not been announced yet.

 

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AdventHealth Buys More Lake County Property

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AdventHealth just bought a portion of Clermont land that was part of a recent, larger sale.

Ohio-based developer Coastal Ridge Real Estate bought a 49-acre property from the Clont family on June 2 for $7.35 million, according to county records. The developer then sold a 24-acre portion of the property closer to U.S. 27 to an entity related to the Altamonte Springs-based nonprofit health system for $5.75 million. The land is next to the 250-acre, mixed-use Olympus development in Clermont, which is slated to feature residential, sports venues, retail and medical uses.

“AdventHealth has no immediate plans for this parcel,” Kari Vargas, CEO of AdventHealth’s West Orange and South Lake market, told Orlando Business Journal. “We will continue to assess the health needs of the fast-growing South Lake County community, to ensure we utilize the property in a way that best serves those needs.”

Founded in 1908, AdventHealth’s Central Florida division includes more than 20 hospitals and ERs in the seven-county area in and around Orlando. Its hospitals and other outpatient services see more than 5.7 million patient visits annually. The health system has 37,000-plus employees across Central Florida. Nationally, the organization has more than $12.5 billion in annual operating revenue.

Meanwhile, Raleigh, North Carolina-based FMI Corp. expects health care construction spending in the U.S. to go from $53 billion in 2022 to $62 billion in 2025. That is due to demand for services for an aging population and the addition of people to certain parts of the country.

 

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