HCA Healthcare purchased nearly 100 acres in Estero for $52.5 million at the end of December, property records show.
The Nashville-based health care system bought the land for a planned hospital in Estero that state regulators approved last year, said Debra McKell, a spokeswoman for HCA West Florida, a division of HCA.
The land is bordered by U.S. 41 to the west, Williams Road to the south and Via Coconut Point to the east. Hertz Global Headquarters sits directly south of the property on Williams Road.
Property records show Fawcett Memorial Hospital, based in Port Charlotte, purchased the 100-acre property Dec. 20 from Estero North Point LTD. Fawcett Memorial Hospital is one of 15 hospitals that belong to HCA West Florida.
A deed for the purchase lists the hospital’s address as One Park Plaza in Nashville, which is the HCA headquarters. McKell confirmed HCA made the purchase. McKell said the land was acquired for the planned hospital and to “explore other uses as well down the road.”
The property purchased by HCA is currently zoned for commercial uses, Estero Community Development Director Mary Gibbs said. HCA would have to rezone the property to allow any medical uses, Gibbs said.
Both health care systems have filed legal challenges to each other’s hospital plans.
The 100-acre property purchased by HCA is less than 5 miles north of Lee Health – Coconut Point in Estero, which opened in early December. Also nearby is Collier County-based NCH Healthcare System’s medical facility that recently opened in Bonita Springs, just south of the city’s border with Estero.
The Lee Health – Coconut Point complex had no impact on HCA’s decision to purchase the property in December, McKell said.
“I don’t think we follow other health systems to determine where we’re putting something,” McKell said.
Lee Health has been working with Estero for more than a dozen years to build a hospital in the community, said Mary Briggs, a spokeswoman for Lee Health.
“We think we have the best location. We’ve already built the complementary outpatient services that serve the hospital,” Briggs said. “We’re just moving forward our plans to build that facility.”
Former Florida governor and now Sen. Rick Scott led what was then known as Columbia/HCA between 1987 and 1997. He left amid a federal investigation into its Medicare billing practices, which ultimately forced the company to pay $1.7 billion in penalties and fines between 2000 and 2002.
HCA formerly operated the now-demolished Southwest Florida Regional Medical Center and what was once known as Gulf Coast Hospital. Lee Health acquired both in 2006 in a $535 million deal.
Estero’s Village Center
The 100-acre property purchased by HCA is within Estero’s village center.
Estero has planned the village center to be a walkable, mixed-use downtown for residents and businesses in the community. Land in Estero’s village center stretches from near Coconut Road to just north of Broadway.
Estero Mayor Jim Boesch said the purchase by HCA is great news for the village.
“We’ve waited long for that 100 acres to come to pass,” he said.
Boesch said development on the property will add to the momentum happening in the village center.
He pointed to construction of the Genova condos at the southeast corner of Corkscrew Road and Via Coconut Point and Estero’s pending purchase of 62 acres along the Estero River at the northeast corner of Corkscrew Road and U.S. 41.
The village is expected to close on the Estero River property Monday, Jan. 14.
“My prediction is U.S. 41 and Corkscrew Road will be the center of town,” Boesch said.
/wp-content/uploads/2020/08/florida-medical-space-logo.png00ADMIN/wp-content/uploads/2020/08/florida-medical-space-logo.pngADMIN2019-01-12 01:44:052019-01-12 01:44:05HCA Healthcare Buys 100 Acres In Estero For $52.5 Million
Thirty years after moving beyond its Midwest base and founding a Florida outpost, Cleveland Clinic has taken a giant leap here this year with a round of acquisitions and expansions that will take it from 155 beds in Weston to 1,058 beds across five Southeast Florida hospitals and a geographic range eclipsing that of its Ohio home.
In October, Cleveland Clinic Florida inked deals to absorb the non-profit Martin Health, a system with three hospitals in Martin and St. Lucie counties, and the non-profit Indian River Medical Center in Vero Beach in Indian River County.
“Our footprint in Southeast Florida is geographically going to be much bigger than our present footprint in northeast Ohio,” says Cleveland Clinic Florida CEO Dr. Wael Barsoum. Indian River lies 128 miles to the north of its base in Weston in Broward County. In Ohio, Cleveland Clinic’s main campus, plus 11 regional hospitals and 18 fullservice family health centers, all lie in a seven-county region within a 30-mile radius of Cleveland.
The two Treasure Coast hospital deals were Cleveland Clinic’s biggest by far, but the year also has seen it expand in Palm Beach and Broward. It opened a medical office in Wellington in March. In north Broward, in July it opened a 73,000-sq.-ft. family health center. In Weston, its Florida base for 17 years, Cleveland Clinic opened a tower and an expanded emergency department that total 221,000 square feet. In Fort Lauderdale, it opened a concierge medical practice this year and imported as its lead doctor a Cleveland Clinic Ohio internist who had been the personal doctor for doctors there, including Barsoum.
Hospital and health system mergers and acquisitions last year totaled a record 115 nationally, according to Illinois consulting firm Kaufman Hill. Driven by Obama-era health law changes and by a desire for negotiating power with insurers in the face of rising costs and decreasing reimbursements, hospitals have gone after scale. Stand-alone hospitals in particular have faced a squeeze.
Barsoum says Cleveland Clinic has cut $1 billion in costs in the last five years from its $8-billion system. “To stay at the top of the hill, you have to be thinking about what’s coming and to an extent be our own disruptor,” he says.
Investment rating service Moody’s says that while Cleveland Clinic is an international brand with strong cash flow and “exceptional fundraising capabilities,” revenue growth is constrained in northeast Ohio. In part, that’s what’s driving the geographic expansion in Florida and also the opening of a 200-bed hospital in London. (Cleveland Clinic also has sites in Toronto, Abu Dhabi and Las Vegas.)
At Martin Health, Cleveland Clinic has promised to invest $500 million over five years. The two already had teamed up on heart and vascular care. A Cleveland Clinic Florida cardiothoracic surgeon joined Martin Health to perform heart and lung surgeries at Martin Medical Center. At Indian River, Cleveland Clinic promised to invest $250 million over 10 years. Indian River board Chair Dr. Wayne Hockmeyer has said Cleveland Clinic’s reputation will be a “powerful recruiting tool” for top-quality doctors.
In its report, Moody’s mentioned more “potential acquisitions” in Florida. Barsoum says the organization is open to the idea. “We recognize health-care organizations, to be successful, need some level of scale,” he says. “We are regularly approached by health systems and hospitals, and we are open to talking with them. If there is a community or hospital that wants us and they are like-minded and a clinical fit, then we look forward to exploring those options.”
Cleveland’s Expanding Reach
Indian River Medical Center and Martin Health have recently joined Cleveland Clinic Florida.
Cleveland Clinic Florida, Weston
Beds: 205
Employees: 3,067
Revenue: $500 million
Staff size: 259 physicians; 2,808 others
Campus: Main campus in Weston with locations in Coral Springs, Fort Lauderdale, Parkland and Palm Beach County
Indian River Medical Center, Vero Beach
Beds: 332
Employees: More than 2,000
Revenue: $290 million
Patients: 15,300 admissions
Physicians: 320
Campus: IRMC includes the Welsh Heart Center and Scully Endoscopy Center within the facility; separate buildings on the campus: Scully-Welsh Cancer Center, Health and Wellness Center, Wound Care Center
Martin Health
Beds: 521
Employees: 4,500
Revenue: $559.6 million
Patients: 34,418 admissions, 117,112 emergency department visits
Staff size: 504 physicians on medical staff, 150 employed physicians
Campus: Three hospitals (two in Stuart, one in Port St. Lucie)
/wp-content/uploads/2020/08/florida-medical-space-logo.png00ADMIN/wp-content/uploads/2020/08/florida-medical-space-logo.pngADMIN2019-01-07 23:48:462019-01-07 23:48:46Expansion Spree: Cleveland Clinic Is Opening New Facilities And Buying Others
The U.S. outpatient care center sector has grown robustly in recent years as asking rents for medical office buildings continue to rise and health systems seek to provide a better patient experience at a lower cost, according to a new report from CBRE.
The U.S. average asking rent reached its highest level on record in Q2 2018, rising 1.4 percent year-over-year to $22.90 per sq. ft., due to tight market conditions and the completion of new, high-quality space.
“Rents increased in two-thirds of the markets tracked by CBRE and grew fastest in some of the markets with the lowest vacancy rates, including Nashville, Manhattan, Louisville, Seattle, and Indianapolis,” said Andrea Cross, Americas head of office research, CBRE.
In addition to rising rents, health systems have increasingly turned to lower-cost outpatient centers—which enable them to provide lower-cost services closer to where patients live—due to higher capital costs stemming from mergers and acquisitions and a surge in in employer-sponsored, high-deductible health plans requiring patients to pay larger out-of-pocket amounts.
The total number of outpatient centers grew more than 50 percent to approximately 41,000 from 2005 to 2016. Outpatient center employment has more than doubled since 2003, and grew 3.5 percent year-over-year in October 2018, compared with 2 percent annual growth in overall healthcare employment.
“Healthcare systems are increasingly catering to patients as consumers—rather than simply users—of healthcare services,” said Mark Lamp, executive managing director, Healthcare, CBRE. “They are creating outpatient facilities that provide a more ‘hotel-like’ experience—and at a lower cost than the more expensive hospital services—with technology-enabled check-in, abundant natural light and incorporated outdoor spaces, and patient care concierges trained to support guests with any needs.”
Capital Markets Trends
Trailing 12-month transaction volume decreased to just below $12 billion in Q2 2018 but remained not far off the cyclical high of $14.2 billion.
“Medical office properties have shifted from a specialty asset class to a core asset class,” said Chris Bodnar, vice chairman, Healthcare Capital Markets, CBRE. “Institutional and cross-border investors have ramped up their medical office acquisition activity, with cross-border investors on pace to record their highest annual level of net acquisitions in at least a decade in 2018.”
Development Trends
Medical office development strongly correlates with population growth, with Phoenix, Houston, Dallas/Ft. Worth and Atlanta among the top markets for total completions from Q3 2017 to Q2 2018, along with Minneapolis/St. Paul, a leading healthcare cluster. Houston, Minneapolis/St. Paul, Atlanta, Chicago, the Inland Empire, Kansas City and Boston rank among the top markets for square footage under construction.
After nearly 60 percent growth in medical office completions between 2011 and 2017, under-construction levels have started to slow, with lower levels of new supply in the coming quarters likely.
“Many hospital systems have slowed their development activity to reexamine their operations, including how to adapt their real estate strategies to provide a better patient experience at a lower cost,” Ms. Cross added.
To download a complete copy of the report, pleaseclick here.
/wp-content/uploads/2020/08/florida-medical-space-logo.png00ADMIN/wp-content/uploads/2020/08/florida-medical-space-logo.pngADMIN2019-01-04 21:52:532019-01-04 21:52:53Outpatient Centers On The Rise As Average Asking Rent For Medical Office Buildings Reaches Record High
Welltower Inc. (NYSE: WELL) and CNL Healthcare Properties announced today that they have entered into a definitive agreement under which Welltower will acquire a Class A medical office and outpatient facilities portfolio comprised of 55 buildings from CNL Healthcare Properties for $1.25 billion. The sale is expected to close during the first half of 2019, subject to customary closing conditions, governmental and other third-party consents.
Welltower will be acquiring 55 assets out of the 63 properties (medical office buildings, post-acute care facilities and specialty hospitals) initially marketed by CNL Healthcare Properties through its strategic financial advisors. The 55 properties have a current occupancy of 94 percent and average annual rent increases of 2.4 percent. The properties are strategically located and 92 percent are affiliated with some of the nation’s premier health systems including Novant, Memorial Hermann and Cleveland Clinic. With 3.3 million rentable square feet in major metropolitan markets across 16 states, the acquisition portfolio will have significant overlap and synergies with Welltower’s existing outpatient medical footprint. Welltower’s proprietary data science and analytics platform has identified this Class A portfolio to have above average market potential defined by opportunity metrics such as market prioritization rank, predictive annual gross rent, insurance/payor mix and physician net need score. At the same time, the portfolio is affiliated with strong hospitals and health systems, none of which are “at risk” hospitals based on Welltower’s proprietary hospital risk analysis.
“Through the strategic acquisition of 55 high-quality medical office buildings from CNL Healthcare Properties, we continue to accretively expand our outpatient medical and health system portfolio,” said Shankh Mitra, Welltower’s chief investment officer. “Welltower was able to act quickly and definitively when the opportunity presented itself, leveraging our proprietary data science platform and deep local presence through our real estate services platform to come to an agreement with CNL as a high quality and reputable sponsor. With market potential metrics and low risk factors, along with a healthy initial cash yield, good escalators and low capital expenditure requirements, this investment will provide an excellent total return for our shareholders.”
CNL Healthcare Properties, a public, non-listed real estate investment trust (REIT) focused on seniors housing and healthcare facilities with a highly respected and seasoned management team, is monetizing this medical office portfolio as part of its ongoing process to pursue strategic alternatives to provide liquidity for its shareholders. The company plans to use the proceeds from the sale to repay debt, pay closing costs and other related expenses. The company, with approval from its board of directors, may use proceeds to rebalance corporate borrowings to further bolster its balance sheet as it pursues additional liquidity alternatives. Post-closing, the company expects to make a special distribution to shareholders, also subject to approval of its board of directors.
CNL Healthcare Properties will continue to own and actively manage a sizeable private-pay, seniors housing centric portfolio of 87 communities located in 31 states.
“Since CNL Healthcare Properties made our first investment in early 2012, we have worked swiftly and thoughtfully to construct and nurture a leading national portfolio of seniors housing and healthcare assets,” said Stephen H. Mauldin, president and CEO of CNL Healthcare Properties. “The sale of our Class A medical office assets to Welltower underscores both the high quality of these properties and our focused work to drive investment performance and value for our investors. Welltower’s deep knowledge of the sector, the CNL platform’s positive experience in past dealings with Welltower, along with its reputation of certainty in delivering on commitments will realize significant value for our shareholders in today’s volatile capital market environment. While we are in the early phases of our strategic liquidity process for the fund, we are confident that this transaction is a strong first step to begin returning capital to our shareholders.”
In June 2018, CNL Healthcare Properties engaged the real estate investment banking groups of HFF Securities L.P. and KeyBanc Capital Markets Inc. to act as strategic financial advisors in exploring and executing potential liquidity alternatives.
Over the last 15 years, CNL Financial Group has been especially active in the seniors housing and healthcare sectors. As of Dec. 31, 2018, CNL-sponsored companies have invested in seniors housing and healthcare real estate investments valued at more than $10 billion, collectively.
/wp-content/uploads/2020/08/florida-medical-space-logo.png00ADMIN/wp-content/uploads/2020/08/florida-medical-space-logo.pngADMIN2019-01-02 22:04:112020-12-28 02:50:55Welltower Agrees To Purchase 55 Medical Buildings From CNL Healthcare Properties
The 560-bed hospital that once threatened to hang like a dead albatross around the neck of the University of Miami Health System has begun to show signs of a financial turnaround — inspiring talk of “a new day” from the chief executive for UHealth, the UM network of hospitals, clinics and doctors that make up the region’s only academic medical center.
“Last year, we had our best financial year ever,” said Dr. Edward Abraham, UHealth CEO.
A growing demand for cancer care, a rise in outpatient clinic visits and the consolidation of three separate UM hospitals under a single license helped UHealth record a $217 million profit for the year that ended May 31, according to a recent Securities and Exchange Commission filing.
That’s nearly three times the $83.8 million profit UHealth reported for the prior year, and includes some good news for the formerly named Cedars of Lebanon Hospital that UM purchased in 2007 but has struggled to make profitable in recent years.
Though the hospital, renamed UHealth Tower, lost $79.1 million for the year that ended May 31, there’s a silver lining: The loss is considerably less than the hospital’s prior year deficit of $94.5 million, and it does not account for a significant investment UM is making to refurbish the aging facility with new operating rooms, interior and exterior renovations, and infrastructure upgrades, including new generators and elevators.
UHealth announced in January that the hospital will be home to a new proton therapy program for cancer, which blasts highly charged proton particles at tumors, reducing damage to surrounding healthy tissue. The program is expected to debut in 2020.
Additional investments in UHealth Tower include five new cardiac catheterization labs and other resources aimed at rebuilding the hospital’s cardiac surgery program, which was set back by the November 2017 departure of two prominent surgeons, Donald Williams and Rogerio Carrillo, specialists in coronary bypass, valve repair, and aortic surgery.
Abraham declined to explain why Williams and Carrillo left UHealth. “I really can’t talk about the personnel actions,” he said.
The surgeons’ departure led to a reduction in cardiac surgeries at UHealth Tower over the past year, and the university has a strategy beyond investing in new resources to rebuild the program — recruiting a star physician who will attract patients from near and far.
Past and present UHealth executives familiar with the system’s plans said that star physician is Joseph Lamelas, a Cuban-American native of South Florida who is considered a pioneer in minimally invasive heart surgery. The former chief of cardiac surgery for Mount Sinai Miami Beach, Lamelas left South Florida for Baylor College of Medicine in Houston in 2017. Sources said he will return to Miami to work for UHealth in January.
Asked about Lamelas, Abraham blushed and laughed. “I can’t say anything,” he said.
The investments in UHealth Tower and the addition of Lamelas are designed to leverage two lucrative services for South Florida hospitals — cancer and cardiac care — and to enhance the system’s core brand as an academic medical center with a faculty practice of nearly 1,300 physicians and specialists, a medical school that trains doctors and performs research, and an integrated network of hospitals and clinics.
“It’s really our destiny,” Abraham said, “to set up these destination programs, these marquee programs that take full advantage of this expertise.”
But some hospital and healthcare experts doubt that UHealth’s brand as an academic medical center will be enough to set it apart from other health systems in the region that have made similar investments.
Baptist Health South Florida, the region’s largest nonprofit hospital system, opened a $430 million cancer center in January 2017 that is partnered with the nationally regarded Memorial Sloan Kettering Cancer Center in New York while Memorial Healthcare System in South Broward is partnered with Tampa’s H. Lee Moffitt Cancer Center and Research Institute, the state’s only National Cancer Institute-designated program.
Allan Baumgarten, an independent healthcare analyst and author of the bi-annual Florida Health Market Review, said lucrative lines of business for hospitals and health systems are also highly competitive.
“At a certain point,” he said, “you have to think that there’s a saturation point.”
Baumgarten said hospitals with destination cancer programs also are vulnerable to changes in payment by Medicare, the national health insurance program for Americans 65 and older, and the largest payer of hospital care in the United States.
Healthcare systems that deliver chemotherapy and other cancer treatment through outpatient clinics are allowed to charge hospital prices, which are higher. But Medicare is moving toward so-called site-neutral payments that would cap reimbursement for clinic visits at a lower rate comparable to that paid for care delivered in a doctor’s office.
“If Medicare is able to do that,” Baumgarten said, “then private insurers will likely follow.”
Joshua Nemzoff, a Pennsylvania hospital consultant who used to live in Miami, said UHealth must find a way to differentiate itself in a market where so many other hospitals and health systems offer more modern facilities located closer to where people live — and the quality of care is generally very good.
“There is no clear standout,” he said of South Florida hospitals.
/wp-content/uploads/2020/08/florida-medical-space-logo.png00ADMIN/wp-content/uploads/2020/08/florida-medical-space-logo.pngADMIN2018-12-26 23:53:442020-12-28 02:51:00UM Health System Reports Its ‘Best Financial Year Ever’ As Cancer Care, Surgeries Grow
