Outpatient Projects (October 2007)

New hospital triggers new MOB projects



By John Mugford


People who work in healthcare real estate say there’s nothing like a new, or financially healthy, hospital to attract ancillary medical developments, such as medical office buildings (MOBs) and outpatient facilities.

This effect certainly is being exemplified in Dublin, Ohio, where OhioHealth is nearing the completion of its new $130 million, 325,000 square foot Dublin Methodist Hospital. The new facility in the growing suburb north of Columbus is slated to open on an 89-acre site near a shopping center in January.

When the new project was announced in 2005, it kicked off several new MOB developments nearby, including medical condominium projects.

An example is a new two-story project being developed by Columbus-based Bedrock Group Development Co. The 32,000 square foot Perimeter West Medical Center has landed several tenants, including a group called Spinal and Orthopedic Medicine Associates, which plans to take 12,000 square feet. The spinal and orthopedic group plans to combine its practice with a 4,000 square foot spa and wellness center called Rue Juve Medical Aesthetics.

The Bedrock Group is offering tenants stakes in or complete ownership of 4,000 square foot condominiums.

Another local development firm, Dublin-based Rj Boll Realty, has already built several medical office condos near the new hospital. It has plans for more medical and medical-related projects nearby as well.

The company, in fact, built a 9,100 square foot office condo building in 2005, kept half and sold the rest to an orthodontist and plastic surgeon. When the principals, Ray C. Boll and his son, Jeffrey A. Boll, learned about the new hospital, they bought more land near the site.

The company’s condo projects have occupants that include a dental practice and dialysis center. And they’re marketing more space to tenants that would benefit from being near the hospital, including a future 15,500 square foot MOB.

In a local news report, Ray C. Boll was quoted as saying the area near the hospital is “very dynamic.” He noted that new homes are being built nearby and that the area is rife with retail.

In addition, Columbus-based The Daimler Group Inc., which develops numerous MOBs throughout Ohio, also has at least a couple of medical developments near the Dublin hospital. Included is a 96,000 square foot MOB that is attached to the hospital.

Daimler also owns a two-story, 35,000 square foot MOB a short distance from the hospital, as well as land available for a new MOB.


$110M outpatient

facilities planned

in Winchester, Va.

WINCHESTER, Va. – As Winchester Medical Center looks to go more high tech, it’s going to need room to house such equipment.

That’s why hospital officials recently unveiled plans for a $110 million outpatient construction project in recent weeks. A local health planning agency, the Lord Fairfax Health Council, recently recommended approval of the hospital’s plan, which calls for the development of an outpatient diagnostic center, a third medical office building (MOB) on the campus, and a five-level parking deck. Not including the parking structure, the proposal calls for about 190,000 square feet of outpatient space.

The proposal is expected to go to state health officials in Richmond for final approval in coming weeks.

Hospital officials say the final drawings are expected by December and construction is slated to start in January. Hospital officials hope the project is completed by mid-2009.

According to officials with the 411-bed Winchester Medical Center (WMC), which is part of the Winchester-based Health Valley system, the hospital campus lacks room to expand its catheterization labs, imaging center, and other services areas. The campus currently has one outpatient facility, but the 21-year-old building does not have enough space for the hospital’s needs, according to officials.

The first phase of the project would be a 64,700 square foot outpatient facility that would cost an estimated $30.3 million. The second phase would be a 124,600 square foot MOB and the adjoining 667-space parking structure. The office building could be expanded to about 215,000 square feet in the future.

San Diego MOB

aimed at lowering

acute-care costs

POWAY, Calif. – Pomerado Outpatient Services opened a new five-story, 175,000 square foot MOB in May as part of Pomerado Hospital’s $28 million phase I expansion on the hospital’s campus.

The new building is part of a trend by hospitals to add on-campus MOBs that provide some acute-care services in less-expensive outpatient settings. Building new inpatient space is considerably more expensive.

A second phase of the expansion was recently announced. It would include additional MOB space and a five-story, 150,000 square foot nursing tower at a cost of about $176 million.

The high cost of the nursing tower, which will double the number of beds at the hospital, is in sharp contrast to the relatively low cost of the $28 million, first-phase MOB.

Furthermore, the typical MOB today has about 80,000 square feet, according to the developer, San Diego-based Pacific Medical Buildings. The Pomerado building is more than twice that size. Therefore, the cost of the average MOB is somewhat less than the $28 million set aside for Pomerado’s phase I. Phase II is expected to be completed in late 2010 or early 2011.

Pacific Medical Buildings is also working on an on-campus MOB in the San Diego area for Sharp Grossmont Hospital in La Mesa. The three-story building would have 64,500 square feet.

Lillibridge starts

new MOB projects

in Florida cities

KISSIMMEE, Fla. – Chicago-based Lillibridge is finding a home in the Sunshine State.

The owner, developer and manager of healthcare properties recently started construction on several projects in Florida, including a new 85,000 square foot MOB on the campus of Florida Hospital Kissimmee.

The HealthPlex at Florida Hospital is scheduled for completion in fall 2008.

In a news release, Florida Hospital Kissimmee noted that increasing demand for healthcare services is the driver of the MOB project. As of recent weeks, the HealthPlex at Florida Hospital was about 80 percent pre-leased. Major tenants signing leases include an ambulatory surgery center as well as an outpatient imaging center and pulmonary, orthopedic and OB-GYN groups.

Florida Hospital Kissimmee is operated by Adventist Health and has 83 beds. It can, however, be expanded to 100 beds in the future.

Once the HealthPlex is completed, Florida Hospital has plans to build a new patient tower mirroring the look of the new MOB.

The owner of the MOB will be SP II Kissimmee LLC, a subsidiary of New York-based Seavest Inc., in a limited liability corporation (LLC) partnership with physician tenants. The architect on the project is Winter Park, Fla.-based Rogers, Lovelock and Fritz (RLF). Lillibridge is the construction manager and the future property manager.

Also, Lillibridge in August started construction on a new MOB adjacent to Florida Hospital Sebring-Heartland Medical Center, in central Florida. The future 40,517 square foot Florida Hospital Medical Pavilion would be the first outpatient facility on the hospital campus. It is scheduled for occupancy next spring.

Lillibridge is also developing an MOB for the Florida Hospital system in East Orlando, as well as facilities in other Florida locations.

In other Lillibridge news, a new 67,000 square foot MOB developed by the firm opened earlier this year in Reading, Pa., on the campus of St. Joseph Medical Center. The St. Joseph Medical Office building was completed in seven months.

The facility includes a new cancer center, vein center, and a physician practice focusing on women’s services. The hospital has relocated some services to the new building as well.

Massive building

to be a ‘gateway’

in Brookfield, Wis.

BROOKFIELD, Wis. – Plans for a four-story, 127,000 square foot multi-purpose office and MOB were approved in August by the Plan Commission in Brookfield, Wis. The building, to be called Fountain Brook Crossing, is slated for a prominent intersection in the Milwaukee suburb, creating what is being called the city’s “southern gateway.”

The next step is for the Brookfield Common Council to consider the proposal, which calls for the approval of a planned development district to allow a building of such size. The 97-foot-tall building would tower above the next-tallest building in Brookfield, the 54-foot Country Brookfield Suites. Even so, the MOB’s square footage, not its height, required the zoning changes. Without the rezoning, the building would have been limited to 27,000 square feet.

The building would include, in addition to its four stories of office and MOB space, two levels of underground parking, a rooftop garden, numerous fountains, and many “green” features. The developer is Bill Hoeg of New Berlin, Wis. A hotel and water park, as well as other projects, are planned adjacent to the site.

Ryan Cos. US Inc.

starts new MOB

outside Milwaukee

MENOMONEE FALLS, Wis. – Minneapolis-based Ryan Cos. US Inc.’s Naperville, Ill., office recently began construction on a second 60,000 square foot MOB in the North Hills Medical Centre in Menomonee Falls, northwest of Milwaukee.

The project comes on the heels of the lease-up of a virtually identical building developed by Ryan Cos. Ryan Cos. plans to complete the new building by November. It is planned as a three-story, 61,000 square foot facility targeted to doctors and medical professionals, including surgical centers. The design features 20,000 square foot floor plates and office spaces starting as small as 2,000 square feet.

Milwaukee-based Inland Cos. Inc. is the leasing agent for the building. The agents marketing the space for Inland are Dan Wroblewski, Steve Pape and Joe Lak.

When Ryan’s other MOB at North Hills Medical Centre was completed in early 2007, Menomonee Falls-based Froedtert & Community Memorial Hospital signed a lease for the entire building. The hospital system plans to use the space for primary care and outpatient services such as medical imaging, laboratory and comprehensive rehabilitation, as well as other specialty diagnostic and treatment services. The space currently is being built-out to Froedtert’s specifications; the hospital is planning to occupy the building in January 2008.

For the Record

Dayton, Ohio-based Miller-Valentine Group recently announced that it will continue its build-out of the University Pointe health campus in growing West Chester, Ohio, north of Cincinnati. The latest project is planned as a 100,000 square foot, four-story MOB. University Pointe is a healthcare campus that is to include the future West Chester Medical Center, a 160-bed hospital slated for completion in 2008. Miller-Valentine is developing the campus with University Physicians and Cincinnati-based Health Alliance, a six-hospital health provider… Brookwood Medical Center in Birmingham, Ala., recently notified state officials of its plans to construct an MOB on its campus. The MOB would be connected to the hospital with a pedestrian bridge. The hospital says the bridge will not cost more than $4.5 million, but it does not yet have a cost estimate – or a size estimate – for the MOB. A hospital spokesperson says Brookwood’s on-campus MOBs are currently 98 percent occupied. Brookwood, which is part of Dallas-based Tenet Healthcare Corp. (NYSE: THC), is in the midst of a $63 million capital improvement campaign, which includes the addition of a 44-room patient tower. The state approved a Certificate of Need (CON) proposal for the tower in December… All Children’s Hospital in St. Petersburg, Fla., is planning to build a new MOB as part of its $310 million, nine-story, 270,000 square foot new hospital project… Newton (Kan.) Medical Center recently opened a surgical center in a new $12 million, 75,000 square foot MOB. The general contractor on the building project was Wichita, Kan.-based Hutton Construction, and the chief architect was Wichita-based Wilson Darnell Mann… A 60,000 square foot MOB is planned as part of an office park in Albany, N.Y. The project is proposed by Stockton, Calif.-based A.G. Spanos Co., and will also include apartments and other buildings… Austin, Texas-based Oxford Alliance Development is planning a new MOB in the southern part of Austin. The MOB will total 35,000 square feet. The facility is scheduled to open in the first quarter of 2008… Anne Arundel (Md.) Medical Center (AAMC) and Baltimore-based Johns Hopkins Medicine have plans for a 55,000 square foot urgent care facility in Chester, Md., along the state’s Eastern Shore. The facility, which is slated for completion in 2008, would house radiology services, a lab station for blood work, a walk-in medical clinic, and offices for primary care, pediatric, cardiology, and other services. Johns Hopkins Community Physicians is planning to provide medical services in the new facility. The joint venture is part of a partnership announced earlier this year between Anne Arundel Medical Center and Johns Hopkins… Indianapolis-based Lauth and its healthcare group recently announced plans for the development of two new medical office facilities in the Atlanta metropolitan area. Construction recently began on Johns Creek Medical Plaza, a medical complex composed of two 90,000 square foot, Class A MOBs across the street from the new Emory Johns Creek Hospital. The campus is located in a growing area at West Johns Crossing at McGinnis Ferry Road. The first building is slated for completion in summer 2008. Lauth reports that it is pursuing other sites in the Atlanta metro area, including a site near the Mall of Georgia. The company also broke ground earlier this year on a healthcare facility for PinnacleHealth in Mechanicsburg, Pa., and opened the Bon Secours Health Center in Virginia Beach, Va…. Northern Pediatrics, a physician practice affiliated with Northern Hospital of Surry County, N.C., recently broke ground on a 10,700 square foot medical office building in Mount Airy, N.C. The future MOB is planned for a new development called North Pointe, just off N.C. Highway 52. The building will initially house five doctors, but it is designed to allow a future expansion. The completion date is scheduled for 2008… Elliot Medical Center at Londonderry in Manchester, N.H., is set to open a new urgent care department next month at the new hospital. Elliot Medical Center opened in April and is part of Manchester-based Elliot Health System. System officials say the new urgent care center is part of an effort to beef up healthcare services in southern New Hampshire. A recent report from the Massachusetts Hospital Association indicates that New Hampshire residents spend about $360 million on medical care in Massachusetts. The hospital project includes several phases, one of which calls for the development of a 60,000 square foot MOB. Those plans have not been finalized… Sierra Vista Regional Medical Center, a 165-bed hospital in San Luis Obispo, Calif., recently received final city approval for the construction of a 45,000 square foot, three-story MOB and five-story parking structure. Chicago-based Healthcare Development Partners (HDP) is the developer on the $25 million project. HDP plans to break ground on the parking structure this fall and start the MOB in four to six months. According to hospital officials, there is a shortage of MOB space in San Luis Obispo and surrounding communities. Completion of the parking structure is expected by May or June; the MOB is slated for completion at the end of 2008. The construction manager on the project is Wisconsin-based C.D. Smith Construction, which plans to hire all local subcontractors… Laguna Hills, Calif.-based Omni West Group recently started construction on The Plaza at Lakeview in Lake Elsinore, Calif. The 5-acre project would have more than 66,000 square feet of medical and professional office condominiums, including a 33,000 square foot building dedicated solely to medical use. The estimated sale price for each unit is about $295 per square foot. Officials with Omni West say office space, both medical and general, is in short supply in the Lake Elsinore area, which is located between San Diego and Los Angeles. Marketing the project is the Riverside, Calif., office of Grubb & Ellis, as well as Temecula, Calif.-based Austin-Brockett Commercial Real Estate Services. The general contractor is HMC Construction of Colton, Calif. Omni West is developing the project in partnership with Sunbelt Properties Management LLC… Rockledge, Fla.-based Wuesthoff Health System announced that it is expanding its presence in the northern part of Brevard County, along what is known as Florida’s Space Coast. Health system officials recently announced plans for a $6.5 million, three-story outpatient medical complex in Port St. John. The 36,000 square foot project is slated for completion in summer 2008. The new complex would be built just 1.4 miles from rival Parrish Medical Center’s new 72,500 square foot healthcare center. Wuesthoff also continues to battle another rival, Rockledge-based Health First, which recently received state approval for a new 100-bed hospital in Viera. Wuesthoff had challenged Health First’s proposed hospital. q

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