Miami Property To Be Rebranded And Repositioned As Medical Office Space

6262 Sunset Drive Miami

Transwestern Real Estate Services’ (TRS) South Florida Agency Leasing team has been selected to exclusively lease 6262 Sunset Drive in Miami, a 96,779-square-foot, eight-story office building at the epicenter of South Miami’s healthcare hub.

Transwestern Senior Vice President Christopher Dubberly will lead the leasing efforts on behalf of building owner USAA, as well as direct the property’s repositioning from traditional office to medical office space. The building will be rebranded as Sunset Medical.

“Sunset Medical is ideally located at the footsteps of South Miami Hospital’s campus. Returning the available space to its highest and best use will appeal to physicians and healthcare providers seeking premier medical office space in a market with less than 5% vacancy,” said Dubberly. “There’s a strong underlying current of pent-up patient demand for services postponed by stay-at-home restrictions. Repositioning this property to medical office now makes it an extremely attractive option for practices that are challenged with how to handle the surge in procedures and surgeries expected the latter part of the year.”

For the past 22 years, the property was 100% occupied by a single tenant that has now consolidated into the top two floors. The remaining 43,064 square feet of availability on floors one through six offer direct entry from the parking garage – a unique feature in the market and highly desirable amenity for medical office space because it eliminates the need for tenants and guests to use elevators for suite access.

“The property also provides high-profile signage opportunities along heavily traveled Sunset Drive,” said Dubberly. “Ownership has committed to renovating the building lobby and elevators, further increasing its premium market appeal.”

6262 Sunset Drive is adjacent to Baptist Health South Florida’s South Miami Hospital campus, benefiting from the hospital’s power grid and equipped with a generator, providing secure business continuity. The average household income within 3 miles is $134,215, and the population is greater than 111,000 residents, which expands to more than 350,000 people within 5 miles. The property is walkable to Metrorail’s South Miami station, as well as local restaurants, shopping districts and entertainment venues.

 

Source: HREI

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West Orange Healthcare District Plans New Nonprofit And Office Building

The West Orange Healthcare District has plans for a new nonprofit and office building as part of its latest initiatives.

The Ocoee-based organization will create the Foundation for a Healthier West Orange, which will oversee Healthy West Orange, a health-related project launched in 2016 by the district, Orlando Health and Sarasota-based Observer Media Group Inc. The new nonprofit, in turn, will launch a new community resource center in 2020 called the Healthy User Bulletin Board (HUBB), which will help area residents find access to local health care and wellness services.

“There are a whole host of organizations delivering health and wellness programs in our community, but not everyone is aware of them, and if they are, they don’t necessarily know how to access them,” West Orange Healthcare District CEO Tracy Swanson said in a prepared statement. “HUBB will bridge the gap between these programs and the people who can benefit from them.”

With the new nonprofit will come a new building to house the Foundation for a Healthier West Orange and West Orange Health Care District in Winter Garden at the corner of Plant Street and Southwest Crown Point Road, a West Orange Healthcare District spokeswoman told Orlando Business Journal. Construction started on the $4.5 million, 25,000-square-foot building in August 2019 and should be completed in spring 2020.

Notably, more than half of the building’s space will be leased to local organizations and businesses, with the earnings from that going to the foundation’s operations. Orlando-based Baker Barrios Architects is the architect for the project, while Orlando-based McCree General Contractors and Architects general contractor.

Initial funding for the new foundation will come through two grants. The first, a $10 million grant, will establish and staff HUBB for its first three years as well as expand Healthy West Orange programs and outreach. The second grant, which totals $40 million, will create an endowed fund whose earnings will fund the organization’s programs from year four onward.

The district, which was founded 70 years ago, will keep its community health care grants program going. The organization has awarded more than $180 million in local grants, including the two grants to the new foundation.

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Florida Tech To Build $18 Mllion Health Sciences Research Center

Florida Institute of Technology will break ground in spring 2020 on a 61,000-square-foot Health Sciences Research Center that will help fill the growing demand for jobs in biomedical engineering and science and allow students and faculty to conduct critical research in labs equipped with the latest cutting-edge technologies, from virtual-dissection tables to atomic force microscopes.

The new, $18 million facility will double the size of Florida Tech’s undergraduate biomedical engineering program to 300 full-time, on-campus students, increase the size of the undergraduate premedical program from 150 to 250 students, provide over 20,000 square feet of classroom and training spaces, and allow students access to teaching laboratories that use augmented and virtual reality tools and space for orthopedics, tissue studies and advanced computational simulations.

“The excellence of a Florida Tech education and our unparalleled success in producing highly desirable graduates make this evolution on our campus and in our educational offerings a natural, powerful step forward,” said Florida Tech President Dwayne McCay.

Employment of biomedical engineers is projected to grow 4 percent from 2018 to 2028, according to the federal Bureau of Labor Statistics. The annual median wage for biomedical engineers, who are often employed in universities, industry, hospitals, research facilities, and government agencies, was $88,550 in 2018, the Bureau reported.

“Along with the demand for more sophisticated medical equipment and procedures, an increased concern for cost-effectiveness will boost demand for biomedical engineers, particularly in pharmaceutical manufacturing and related industries,” the Biomedical Engineering Society noted.

The new Health Sciences Research Center will directly support Florida Tech’s mission to provide high-quality education to a culturally diverse student body and to expand knowledge through basic and applied research.

The Center will be built on a vacant parcel of land on the south campus area known as the Olin Quad. It will be south of the Olin Life Sciences Building and adjacent to the quad’s newest buildings, the Harris Center for Assured Information, which opened in 2009.

The Center will be funded by the sale of Educational Facilities Revenue Bonds.

 

Source: Florida Tech University

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Medical Office Building Coming To Beachwalk In St. Johns County

Rendina Healthcare Real Estate and Twin Creeks Development Associates are partnering to develop a 60,000-square-foot medical office in Beachwalk, the 1,200-acre master-planned community in St. Johns County.

The office will provide space for a variety of health care providers to serve nearby residents. The Beachwalk community is expected to have 2,800 single-family units and 348 apartment units. The community centers on the 14-acre Crystal Lagoon, the largest man-made lagoon in the country.

“With this project, residents of Beachwalk and surrounding communities will have convenient access to an important new amenity,” Beachwalk Developer John Kinsey said in a statement. “Beachwalk will also offer many options for dining, entertainment, shopping, recreation and commercial office space – offering more than 2 million square feet of non‐residential space.”

 

Source: JBJ

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Medical Office Buildings Remain in Demand Among Investors

There continues to be very strong investor appetite for medical office buildings (MOBs), according to several industry sources.

Roughly $4.7 billion’s worth of medical office buildings traded in the first half of 2019, according to Mike Hargrave, principal at Revista, a medical research real estate firm. While investment volume in the sector is off its recent highs of 2017 and 2018, that’s been due to fewer portfolios coming on the market recently, says Hargrave. Investment sales volume in the MOB sector reached $6.5 billion in the first half of 2018 and $12.4 billion for the whole year, according to Revista data.

Investment sales activity for the second quarter of 2019 totaled $3.0 billion, Revista reports. A large portion of this total came from Welltower’s $1.25 billion purchase of 55 medical office buildings from CNL Healthcare in June.

“It remains to be seen if 2019 will rival the past two years [in] total transaction volume. If it falls short, it will be due to not as many large portfolio transactions, which could have been impacted by higher interest rates during the earlier part of the year,” says Matt Withey, managing director of acquisitions at Virtus Real Estate Capital, a private equity real estate firm. “But appetite remains very strong, especially for high quality medical office buildings. Investors remain drawn to the durability of the cash flow stream, especially those who think we are in the later stage of the current economic cycle.”

Pricing remains tight for medical office building, with cap rates averaging 6.6 percent in the second quarter of 2019. Earlier in the cycle, cap rates for medical office buildings were much closer to those for suburban office buildings, according to a report from research firm Real Capital Analytics (RCA).

According to Revista, cap rates on MOB properties have averaged at 6.4 percent over the past 12 months. But they can range from the low 4.0 percent to high 7.0 percent, with the “low end representing larger core medical office buildings in well-located markets” and the “higher end representing value-add plays,” says Hargrave. Withey says many medical office buildings trade at cap rates of between 5.5 percent to 7.0 percent.

“There’s still a lot of transaction activity. If there was a huge gap with buyers holding firm and not selling anything and bidders wanting a discount, you would see a sharp drop in deal activity and cap rates flat” says Jim Costello, senior vice president with RCA. “But we’ve got elevated cap rates and single asset sales, so the bedrock of the market is still doing great and growing.”

Medical office building completions in the U.S. average roughly 20 million sq. ft. annually. New construction in the space has gone through ups and downs since 2017, largely due to factors such as HVCRE regulations, high construction costs and labor shortages. For this reason, MOBs are “not facing an oversupply problem like a lot of other sectors.” according to Withey.

“The services delivered within medical office buildings [are] growing faster than the space [they are] delivered in. Additionally, increases in technology [are] allowing more and more procedures that were traditionally delivered within an in-patient setting to be delivered in an outpatient setting,” says Hargrave. “So, demand for new state-of-the-art space is consistently increasing within the medical office building sector.”

Most healthcare REITs, including Welltower, Ventas, HCP, as well as REITs focused specifically on medical office buildings, such as Physicians Realty Trust, Healthcare Trust of America, and HR, continue to have an appetite for buying medical office buildings, says Hargrave. Additionally, several large institutional investors, including Harrison Street Realty Capital, MB Real Estate and LaSalle, have a focus on the sector.

Despite some unpredictability in large portfolio activity in the MOB sector, Withey says “private and institutional investment has been consistent and growing.”

 

Source: NREI

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