Vote Coming On Jackson South Medical Center Expansion

Marcus & Millichap Senior Managing Director Douglas K. Mandel , along with First Vice President Benjamin H. Silver, Associate Adam Klein and Debt Financing, Senior Director Eric Fixler, negotiated the sale of Highland Park Office Center, a ‘Class A’ office building in Miami’s Health District.

Douglas K. Mandel

Mandel

TOPMED MIAMI HEALTH DISTRICT LLC purchased the 42,489-square-foot asset from HIGHLAND PARK CENTER LP, an entity managed by Key International for $13,875,000. Key International acquired the property for $7.850 million in 2014. The deal closed May 24.

“The asset was priced far below replacement costs and is situated in one of Miami Dade’s most dynamic and fastest growing markets with significant mixed-use and apartment developments taking place around the property,” commented Mandel.

Benjamin Silver

Silver

The asset is one of the newest delivered office properties in the market and in proximity to the health district, one of Miami Dade’s fastest growing and highest demand office and medical office locations.

The two most significant challenges with the deal were that the primary tenant, a for-profit school, occupied over 60% of the GLA.  Secondly, a third of the Property’s total income was derived from two billboards, which created a significant risk as a tremendous amount of the value of the deal hinged on the long term potential of that income.

“The deal worked for both sides as former ownership capitalized on accessing equity by selling a stabilized asset,” explained Silver.  “The new ownership is now poised to take advantage of a longer term hold by capitalizing on rental growth and market appreciation in the future as well as the ability to rebrand the asset and acquire an asset below replacement cost.”

Located at 1011 Northwest Sunnybrook Road, the building’s site is strategically situated across from the University of Miami’s Jackson Memorial Hospital campus, two blocks from the Miami-Dade Court House and fronts State Road 836 (Dolphin Expressway), the main artery between Miami International Airport and Miami Beach.

The 2011-built building, which features structured parking, had gone through a bankruptcy and was acquired mostly vacant aside from significant wallscape income.  Key International acquired the asset and immediately filled most of the space with Atlantis University, a for-profit school, which favored the property due to the highly visible nature of the signage rights and accessibility throughout the county for its student body.  Despite being an ideal medical location, the school lease fell into the owners’ laps with the additional ability to build out the space in a modern, highly-functional way, which made financial sense. The remaining tenants were a mix of small professional and medical tenancy.

 

Source: CRE-sources

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Key International Sells Miami Health District Building For $320 PSF

TopMed Realty, a private health care real estate investment firm, paid $13.9 million for an office building in Miami’s Health District.

Key International, along with its partner on the project, 13th Floor Investments, sold Highland Park Center, a Class A, 43,000-square-foot building at 1011 Sunnybrook Road for more than $320 per foot.

The 11-story building, which was completed in 2011, sold fully leased to tenants that include Atlantis University and Night and Day Pediatrics. Property records show Key International and 13th Floor purchased the property as an REO from BankUnited for $7.85 million in 2014. It includes a garage.

Douglas Mandel and Benjamin Silver of Marcus & Millichap represented the seller, according to a release.

TopMed Realty, led by Roni Soffer, is based in Hallandale Beach.

The property is across the street from University of Miami’s Jackson Memorial Hospital campus.

 

Source: The Real Deal

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Cleveland Clinic Gets Unanimous Nod To Negotiate For VGTI Building In Port St. Lucie

The Cleveland Clinic, which has quickly established a presence across the Treasure Coast, already wants to expand that presence by taking over the former Vaccine & Gene Therapy Institute of Florida facility and establishing a cancer and neuroscience research center here.

A Miami-based medical marijuana-research company, JBS Renovations, also wants to acquire the former VGTI property, now called the Florida Center for Bio-Sciences. Unlike Cleveland Clinic, however, it is offering cash — $14.5 million — for the 8-acre campus and 107,000 square-foot building.

The Port St. Lucie City Council Tuesday voted 5-0 to authorize City Manager Russ Blackburn to enter negotiations with Cleveland Clinic’s Lerner Research Institute, which would allow the city to continue its goal of transforming the Tradition area into a biotech research corridor.

Blackburn will bring a draft agreement to the City Council in 60 days.

“I’m looking forward for a great partnership,” City Councilwoman Stephanie Morgan said. “I can’t wait to see the name change on the building.”

An agreement to take over the city-owned research building would reduce its operating expenses by $1.5 million a year, according to the city.

Mayor Greg Oravec said Cleveland Clinic’s reputation for being a “world-class brand” in medical research would help the city

“I truly believe in my heart that this will be for the better of healthcare in Port St. Lucie, for the better of biotechnology in the state and also the world,” Oravec said.

Cleveland Clinic’s proposal includes creating a translational vaccine and immunotherapy institute that would become the focal point for development of treatments in areas such as cancer, neuroscience, infectious disease and allergies, according to a city news release.

An unnamed international biotech company would share the building with Cleveland Clinic, according to the news release.

Cleveland Clinic proposes creating 100 jobs over the next five years.

The hospital’s proposal, however, does not include payments to the city for the building.The unnamed biotech company would assume full responsibility for building maintenance, operating expenses and payment of special assessments and community-development fees.

Cleveland Clinic would be responsible for all costs associated with the recruitment and employment of research scientists, according to the city.

In January, Cleveland Clinic completed a $500 million takeover of Martin Health System and its three hospitals, and a $250 million takeover of Indian River Medical Center.

Acquisition of the ex-VGTI property would expand its footprint in the Tradition Center for Innovation, joining Cleveland Clinic Tradition Hospital.

After Cleveland Clinic acquired Martin Health System, its officials began requesting information about operation and maintenance cost of the former VGTI campus and made several site visits, a city spokeswoman said Monday afternoon.

Florida International University is in the process of acquiring the Torrey Pines Institute for Molecular Studies — next to the VGTI site — for a “specialized-purpose” research center.

“With Cleveland Clinic’s proposal, the city of Port St. Lucie would fulfill its long-held vision for this facility, to add a new pillar to our economy of high-end research,” City Manager Russ Blackburn said in a statement.

“Becoming an established home for Cleveland Clinic’s international health-care brand and the world-renowned Lerner Research Institute would be game-changing for Port St. Lucie and our jobs corridor,” he said.

If Cleveland Clinic successfully acquires the property, it would put an end to a nine-year financial struggle for Port St. Lucie. The city borrowed $64 million in 2010 to build and outfit the 107,000 square-foot facility to lure the biotech company.

VGTI Florida opened in 2013 and was required to repay the money — with interest —over 30 years. However, it began losing funding and closed in October 2015.

When VGTI stopped making loan payments in 2015, the city assumed the financial responsibility. The city still owesabout $53.7 million, a city spokeswoman said.

 

Source: TC Palm

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The First ‘Vertical Medical Cities For Senior’ Set To Rise In Orlando And Chicago

As her first vertical medical city for seniors, a $1.1-billion, 1.4-million-sq.-ft. project, is starting construction in Orlando, Fla., Tabitha Ponte, CEO of Ponte Health, is planning her second medical city. Work on the next site, in downtown Chicago, will start in several months, with the project costing $600 million at a much smaller scale than the Orlando one. Ponte has also located future project sites within the U.S., including three more in Florida, possible sites in Portland, Ore. and Denver, and then Ponte “leaves the country to expand.”

The concept of a vertical medical city originates from the need to solve problems surrounding transportation and time constraints for seniors between medical appointments, to streamline their healthcare, according to Ponte. “Unless someone is in the ER, getting a CAT scan could be a several week process,” Ponte says.

In Orlando, Ponte’s facility covers three acres, and is densely built for 955 apartments, some of which are two-bedroom, two-bath units for married couples or siblings. There will be a total of 1,300 beds. This site encompasses half-a-million square feet of medical outpatient territory and 200,000 to 300,000 sq. ft. of research and pharmacology space, a kind of all-in-one medical facility in a dense living space, geared toward convenience.

(This Q&A has been edited for length, style and clarity.)

 

NREI: What was your process for finding and constructing the Orlando site?

Tabitha Ponte: We didn’t have a market sector or focus, but instead saw the concept of a pure medical city to solve major transportation and time problems. As it evolved with research, we began targeting the geriatric sector. We started to understand the statistics and projections of the market when it comes to chronic conditions in those over 65, and the necessity of solving the problems for this group. Vertical Medical City is both residential and outpatient, as well as a research facility with geriatric doctors and additional doctors doing research on targeted projects.

 

NREI: What are the costs associated with creating a medical city and what are the rents for potential residents?

Tabitha Ponte: My response about incurred costs is counter to the market. People think that the rent would be higher, but because of the way we’re building the site, it actually creates a density, and we can lower the rent to 30 to 40 percent of market cost. We are also able to take on this project because offsite we have other high-performing properties, which aren’t residential, and the research opportunities for residents to participate get compensated in a way that will offset the cost. It’s a unique microcosm of economic restructuring. Rents will be $5,000 to $9,000 for extreme care, end of life or stroke recovery assistance problems.

 

NREI: How does the Chicago vertical medical city concept compare to Orlando’s site?

Tabitha Ponte: Chicago is a leaner development with fewer units at 250, but it still has a medical outpatient and medical research component. Due to the urban infill, it won’t take up more than half an acre.

 

NREI: What are the data points for the Chicago site? Are there any special amenities included?

Tabitha Ponte: There will be between 150,000 and 200,000 sq. ft. for medical research, which is leaner than the Orlando space. Orlando has the capacity for biomedical and pharmaceutical research, prosthetics, and more. Chicago’s density is better suited for more data-based scientific research. The rent is similar to Orlando, with some wiggle room for market changes. Ideally, it will be designed in 16 months, with final construction by 2024. The site will be comprised of 23 stories.

Additionally, our restaurants in both facilities will include a vegan lifestyle, and in Orlando, there will be a farm-to-table component. In Chicago, we will partner with a farm. The idea is to bring down the pricing, so it cuts the cost of paying the prices of an organic grocer like Whole Foods, because this will literally be farm-to-table on a 3,000-person scale. There is no precedence for this kind of facility with these types of amenities.

 

NREI: Why is now a good moment to build a vertical medical city?

Tabitha Ponte: Statistics say there should be one everywhere for chronic conditions, especially for seniors with Alzheimer’s. In fact, we’re not building fast enough for what the market will need 25 years for now.

 

NREI: How many mixed-use developments in downtown areas are out there with these kinds of medical research and laboratory components?

Tabitha Ponte: There are no buildings like these out there. Some people are trying to build geriatric and assisted living spaces in the urban setting, but they are not reaching into innovative food and technology.

 

NREI: Why didn’t this trend catch on earlier?

Tabitha Ponte: My team and I are not driven by money; we are driven by the quality outcomes we can achieve and what’s needed in this sector. Most business is structured by profit and cost alone, and no one would take on this project based on costs alone because it would be insane to take on this much of an expense. For me, it’s worth spending because of what it will do for the senior population. The real estate task is a vehicle to get us there.

 

NREI: Why did you choose Chicago for your next location?

Tabitha Ponte: A vertical medical city should exist in every city in the world. Chicago is specifically appropriate with developed urban conditions without the extreme density and costs of New York City. Statistically, we looked at dementia and Alzheimer’s, and Illinois is in mid range in terms of projections, in a similar way as Orlando. High projections for Alzheimer’s are in the Southern belt, such as in Georgia and Texas. The Pacific Northwest has the [lowest] projections.

 

NREI: What are some of the challenges of doing this type of project in terms of mixing assisted living with other complex real estate users?

Tabitha Ponte: When you enter the healthcare sphere, one of the biggest challenges is liability. Operators need clean and concise tools in place for the residents and physicians in protection of rights and liability. We have had a significant legal team early on because we are entering an unexplored AI program, which involves who owns what and privacy rights. We fully intend to use facial technology through the building for the benefit of the residents and the physicians, for identification and safety reasons. If understood, every different type of user, resident and guest, will be willing to subject themselves to this technology, but it is still very new.

 

NREI: What kind of demand do you expect from seniors and when will the greatest demand occur?

Tabitha Ponte: There’s a huge demand, especially if you are 75 and older with chronic illnesses, which often includes recurring strokes. The goal is to bring the elders back to the urban core, which is often closer to their families and to cater to them as their physical bodies deteriorate.  We are caught in a culture where we’re taught not to think about health problems, and then suddenly someone ends up in the ER, and everyone has to deal with healthcare issues. We’re trying to make a cultural shift into how people feel about deterioration and help those who live with two or three chronic health conditions by improving their quality of life, deleting transportation and time issues, and adding a research and development component.

 

Source: NREI

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Florida Medical Office Building With Surgery Center Sells For $25.7M — 3 Insights

Real estate investment trust Welltower purchased Jacksonville, Fla.-based CenterOne Surgery Center’s medical office building for $25.7 million from CNL Healthcare Properties, the Jacksonville Daily Record reports.

What you should know:

1. The three-story medical office building is around 100,000 square feet.

2. CNL sold the medical office building to Welltower as part of a $1.25 billion property bundle.

3. CNL Healthcare Properties President and CEO Stephen Mauldin said, “The sale of our 55-building, class A medical office portfolio to Welltower represents a strong, early-value realization step for CNL Healthcare Properties.”

Source: Becker’s ASC Review

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