Hospital Expansions Surge, MOB Transaction Volume Doubles

construction site with crane and building_canstockphoto7783211 760x320

As the population grays, with older Americans projected to outnumber children in 2035, according to the Census Bureau, hospital systems are looking to build and investors are looking to get a piece of the action by buying medical office buildings — a sector that saw acquisition volume more than double year-over-year.

Hospital construction is up, with 45.1M SF of new construction in progress, up from a pipeline of 37.4M SF in Q2 2021 and 28.7M SF in Q2 2020, according to healthcare real estate specialist RevistaMed.

Hospitals are expanding at a brisk rate as well. Expansions totaling 50.4M SF are underway, up from 44M SF during the second quarter of 2021, though down from Q2 2020, when total expansions underway reached 53.9M SF.

Of the 163 new hospital projects underway, 30 projects are microhospitals of fewer than 25 beds, which are part of the trend toward community-oriented healthcare, RevistaMed reports. Most hospital developments are still standard in size, however, with an average of 134 beds.

Among the largest projects, the University of California, San Francisco received permission to build a $4.3B hospital at UCSF Helen Diller Medical Center, and Sacramento-based University of California, Davis Medical Center began work on a new $3.8B facility, according to Becker Hospital Review.

Work is also underway on $500M-plus hospital projects in New York, New Jersey, Massachusetts and Texas, Becker reports.

Amid an emphasis on health and well-being, investors are also eager for medical office buildings. RevistaMed reports that there were $4.3B in MOB acquisitions by investors in Q1 2022, up from $2.1B during the same quarter last year.

In 2021, the medical office sector saw $15.4B in transactions, according to Newmark, a record amount, up from the prior record of $14.9B in 2017. Last year’s total was also up from $13.5B in 2020.

The sector has benefited from stickier tenancy and an aging population, healthcare real estate experts say. A record amount of capital for alternative commercial real estate sectors has also led more investors toward MOBs.

“There’s been a steady increase in the amount of institutional capital that has been allocated to medical offices,” Newmark Senior Managing Director Michael Greeley said during Bisnow’s Boston Healthcare Summit earlier this month. 

 

Source:  Bisnow

/0 Comments/by

Medical And Professional Building Sells For 75% Increase In Less Than One Year

1301_N_Congress_Ave 760x320

An Atlanta and South African-based buyer, OrbVest US, Inc., recently closed on Congress Executive Center, a 4-story medical and professional building located at 1301 N. Congress Avenue in Boynton Beach.

The property, which was 100% occupied, closed on May 12 for $11 million.

Executive Managing Director Mark M. Rubin, Director Bastian Laggerbauer, and Financial Analyst Jake Stauber of Colliers’ South Florida Investment Services Team represented the seller, Triple Double Real Estate (Andrew “Avi” Greenbaum and Jeremy B. Becker) in the transaction. Andy Belew of Consilium Capital Partners represented the buyer.

“The trade of Congress Executive Center represents a 75% increase in value from its previous purchase price, less than one year ago,” said Rubin. “This sale is indicative of the strong demand for stabilized medical office properties with solid fundamentals, sound in-place tenancy and investor confidence in the Boynton Beach submarket.”

The 40,210-square-foot, 4-story, medical and professional office is located on nearly 2 acres, adjacent to the Boynton Beach Mall, which has plans for a major redevelopment. With plans for abundant shopping, dining, and entertainment across the street, Congress Executive Center stands out as one of the most strategically located medical and professional office buildings in the area.

“Congress Executive Center is a great addition to the buyer’s current and impressive portfolio of healthcare real estate,” said Laggerbauer. “The seller was able to increase the property’s value significantly by attracting strong medical tenancy to the asset and achieving a 100% occupancy rate.” 

The office investment market in South Florida broke records in 2021, despite uncertainties surrounding the coronavirus pandemic and return to the office delays. South Florida’s strong demand drivers like, declining unemployment, population growth, and confidence in the economy are creating an imbalance in supply and demand. Including Boynton Beach, there is limited supply of quality products with competitive buyers driving the price up; sales price per square foot increased 19 percent year-over-year, ending in 2021 at $285. Boynton Beach, amongst the rest of South Florida, is expected to see another strong year for office investment. However, high demand and limited supply will likely remain imbalanced.

 

/3 Comments/by

$242M Gulf Coast Medical Center Expansion Completed In Fort Myers

Gulf Coast Medical Center 760x320

Lee Health has completed the renovation and expansion of its Gulf Coast Medical Center in Fort Myers, Florida.

The $242 project comprised a 365,700-square-foot expansion and a renovation of 48,500 square feet of healthcare space that included adding new hospital beds and intensive care units (ICUs) and expanding the central energy plant.

A three-story vertical expansion added 216 patient rooms on top of an existing bed tower. The project also added a new three-story care tower with 52 ICU rooms, a 16-bay dialysis suite, and three new endoscopy and bronchoscopy procedure rooms.

To support the increased bed capacity, expansions and renovations were completed in the clinical laboratory spaces, pharmacy department, food services, public dining space, back-of-the-house services, and the central energy plant. A total of 43 phases were delivered as part of the overall project.

 

Source:  Healthcare Design

/1 Comment/by

$100M Medical Office Project Planned In Clermont

Olympus-medical-campus-rendering

Real estate developer Olympus closed a deal to build a $100 million medical office campus with Healthcare Trust of America in Clermont, Florida.

Healthcare Trust acquired the 6-acre site on May 6 for $4.2 million. Olympus said it will build 175,000 square feet of medical office space to anchor the Olympus Health & Wellness campus in two phases.

The medical buildings will house cardiology, dermatology, endocrinology and orthopedics offices. Olympus developer Mike Carroll told GrowthSpotter the project will create at least 325 jobs.

 

Source:  Becker’s ASC Review

/1 Comment/by

Brevard Planning Board OKs Zoning Change, Variances For New Merritt Island Hospital

Health First Wellness Village-Merritt Island 760x320

Despite concerns raised by residents of a neighboring condominium development, a county advisory board this week approved zoning changes and variances that would allow Health First to build a new hospital and “wellness village” on Merritt Island.

The unanimous approval  from the Brevard County Planning and Zoning Board follows a similar unanimous vote on April 28 from the Merritt Island Redevelopment Agency. Health First’s proposal now goes to the Brevard County Commission for a potential final vote on May 26.

Health First wants to build a seven-story, 120-bed hospital with an adjoining medical office building and “wellness village” on a 15.05-acre site, across State Road 520 from Merritt Square Mall. The $508 million complex would replace the current six-story, 150-bed Cape Canaveral Hospital off State Road 520 in Cocoa Beach, which would close when the new hospital opens.

 

Source:  Florida Today

/2 Comments/by