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Feature Story: Revista’s top outpatient developers of 2018 are… (UPDATED)

Anchor Health Properties led in two categories, with PMB topping the other

Anchor Health Properties is developing the 200,000 square foot Center for Advanced Healthcare at Brownwood in a partnership with The Villages (Fla.) Health. (Rendering courtesy of Anchor Health Properties)

(UPDATED) The rankings of the top outpatient healthcare real estate (HRE) developers in 2018 are complete, as Arnold, Md.-based Revista has released the results of its third annual development report.

The company, which focuses on thoroughly compiling and disseminating data concerning the HRE sector for its subscribers, recently issued its third annual Outpatient Healthcare Real Estate (HRE) Development Report. Also known as the Revista development survey, the report was compiled in collaboration with Healthcare Real Estate Insights, a Minneapolis-based media company solely dedicated to covering news and trends in healthcare facility development, financing and investment.

The objective of the report is two-fold: To report on the amount of development of HRE outpatient facilities, generally referred to as medical office buildings (MOBs); and to determine the top third-party development firms from the previous year, in this case 2018.

In a previous article (please see “MOB development remains on its steady course,” from the 2019-20 HREI Resource Guide), we shared Revista’s data on the overall volume of outpatient development that took place last year. In that article, we noted that 2018 saw a slight drop in the number of new medical office buildings (MOBs) and other outpatient facilities completed when compared to the two previous years. However, the year did see an increase in square footage and aggregate MOB project values nationwide when compared to 2016 and 2017.

As for the top developers of 2018, Charlottesville, Va.-based Anchor Health Properties, a more than 30-year-old firm that has accelerated its growth in development, acquisitions and management in recent years, was tops in two categories: “Projects Started” and “Projects Started or Completed.”

PMB recently completed the $170 million, 250,000 square foot Sutter Van Ness MOB on the California Pacific Medical Center (CPMC) campus in San Francisco.” (Rendering courtesy of PMB)

In the other category, “Projects Completed,” the top developer was San Diego-based PMB, another longstanding HRE firm with roots dating back to the early 1970s.

Concerning its performance in 2018, Anchor Health Properties registered seven projects with a total of 644,173 square feet in the “Projects Started or Completed” category. PMB was in the next position, with five projects and 463,857 square feet.

In the “Projects Started” category, Anchor commenced seven projects with a total of 608,000 square feet in 2018. Denver-based NexCore Group LP was in the second position with six projects and 240,460 square feet.

For Anchor, about half of the projects it started or completed in 2018 were financed in whole or in part by the company, according to CEO Ben Ochs. The remainder were started or developed on a fee basis for clients.

“We are honored and humbled to be named at the top of these two lists and are very proud of the commitment, talent and hard work demonstrated by our teams on these important projects,” Mr. Ochs tells HREI.

“We believe our active development work, as well as our future development opportunities, are a result of our relationship-focused approach, our commitment to delivering tailored medical properties that reflect the strategic needs of our clients and facilitating creative capital solutions that achieve our clients’ desired financial outcomes,” he adds. “We are extremely grateful for the trusting relationships that we have earned, resulting in repeat work with existing clients.”

The biggest project Anchor broke ground on in 2018 is in The Villages, Fla., the massive 55-plus community in the central part of the state. There, Anchor is developing the 200,000 square foot Center for Advanced Healthcare at Brownwood in a partnership with The Villages Health.

Mr. Ochs says he is optimistic about the prospects for developing MOBs now and in the future.

“The medical office sector continues to benefit from favorable demographic tailwinds and, when combined with strong interest from health providers to grow their market share and commercial payor mix, this results in an environment ripe for future development,” he says.

For PMB, topping the “Projects Completed” category “is a tribute to (our) long-term partnership approach and our focus on repeat business with our healthcare clients,” CEO Mark Toothacre tells HREI. “We were delighted to complete the largest project in PMB history, the new 250,000 square foot, $170 million MOB at the recently opened California Pacific Medical Center campus in San Francisco.”

That project, Mr. Toothacre notes, is now 83 percent leased, with momentum building with the opening of the new hospital next door in March. The company, he adds is also developing other types of healthcare facilities not included in Revista’s report, such as post-acute and senior housing facilities.

Like Mr. Ochs of Anchor, Mr. Toothacre sees good things ahead for experienced, knowledgeable firms involved in MOB development.

“It is as good or better than any time in my 30-year,” he notes. “The baby boom generation is entering its prime healthcare consumption age, consolidation has driven the need to rationalize newly formed networks, and a good portion of existing MOB supply is dated and becoming obsolete. All of these factors combine to create demand for new outpatient space.”

According to Revista, third-party development firms are those that “oversee the full spectrum of development of a construction project to include the coordination of the contractor, architect, financing of the project, obtaining all permits and often overseeing the lease up of a construction project.”

The projects included in Revista’s report include those that are owned by such firms, either outright or in partnerships, and those that they develop on a fee basis for clients.

Top 10 Developers of Projects ‘Started or Completed’

For 2018, here are the top 10 leaders in the “Projects Started or Completed” category, as ranked by square footage:

  1. Anchor Health Properties, nine projects totaling 644,173 square feet;
  2. PMB, five projects totaling 463,857 square feet;
  3. Realty Trust Group, seven projects totaling 366,262 square feet
  4. Rendina Healthcare Real Estate, four projects totaling 330,769 square feet;
  5. Trammell Crow Company, two projects totaling 256,810 square feet;
  6. NexCore Group LP, five projects totaling 253,327 square feet;
  7. Ryan Companies, seven projects totaling 240,137 square feet;
  8. MedCraft, three projects totaling 204,331 square feet
  9. Loudermilk Construction, two projects totaling 200,757 square feet;
  10. Ellicott Development, one project totaling 194,000 square feet;

Top 10  Developers of Projects ‘Started’

For 2018, here are the top 10 leaders in the “Projects Started” category, as ranked by square footage:

  1. Anchor Health Properties, seven projects totaling 608,000 square feet;
  2. NexCore Group, six projects totaling 240,460 square feet;
  3. Trammell Crow Company, one project totaling 200,000 square feet;
  4. Ellicott Development, one project totaling 194,000 square feet;
  5. Rendina Healthcare Real Estate, two projects totaling 186,186 square feet;
  6. Realty Trust Group, four projects totaling 180,600 square feet
  7. Pappas Properties LLC, one project totaling 176,640
  8. Boji Group, one project totaling 145,000 square feet;
  9. Rubicon Representation LLC, two projects totaling 140,000 square feet;
  10. Ryan Companies, four projects totaling 114,337 square feet

Top 10 Developers of Projects ‘Completed’

For 2018, here are the top 10 leaders in the “Projects Completed” category, as ranked by square footage:

  1. PMB, two projects completed with a total of 281,000 square feet;
  2. MedCraft, three projects totaling 204,331 square feet
  3. Realty Trust Group, three projects totaling 185,662 square feet
  4. Messer Construction Co., one project totaling 176,000 square feet;
  5. Crescent Heights Commercial, one project totaling 165,000 square feet;
  6. The Giamalas Co., one project totaling 160,000 square feet;
  7. Ryan Companies; five projects totaling 154,800 square feet;
  8. Cambridge Holdings Inc., two projects totaling 154,300 square feet;
  9. Health America Realty Group, one project totaling 150,000 square feet.
  10. Rendina Healthcare Real Estate, two projects, 144,583 square feet

According to Mike Hargrave, Revista’s co-founder and principal, 25 third-party development firms returned surveys. Revista also identified projects from another 140 companies through various sources.

He says any firms wishing to participate in future surveys should contact him at mike@revistamed.com.

For more information and to obtain copies of the 2018 Outpatient HRE Development Report, please visit RevistaMed.com.

Development: MOB development remains on its steady course

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