- HPRG has been hired by Alliance HSP to lease up to 185,000sf of medical office space at 14041 Worth Avenue Potomac, Mills In Woodbridge, VA at the new Potomac Mills Medical Center
- HPRG has been hired by the Greenwich Group to lease 50,000sf of medical space at the New Carrolton Regional Medial Center at 8500 Annapolis Rd
- Chris Kaminski has joined the HPRG leasing team to cover Pennsylvania
HRPG's Un-Medical Properties
Health-Pro Realty Group (HPRG) principal Charles Feitel tells us that the hot trend in medical buildings is non-traditional medical locations, specifically former retail big boxes such as Barnes & Noble and Best Buy. In fact, a medical center just made its new home in a former mall in Atlanta. Now, the idea is catching fire in the DC area, with Chuck working on at least three non-traditional listings in the last six months. One of these is in New Carrolton—a 50k SF empty office building in the high-visibility location of The Beltway and Annapolis Road. Another is at a former retail space in Potomac Mills, Woodbridge, where 80k SF of it will go medical.
81st Annual Nation’s Capital Dental Meeting
Chuck Feitel, principal of Health-Pro Realty Group, will be teaching a course at the 81st Annual Nation’s Capital Dental Meeting. The meeting will take place March 7th - March 9th, 2013 at the Washington, DC Convention Center. Mr. Feitel's course will focus on real estate and how it pertains to dentists and their needs. Learn more about the Nation's Capital Dental Meeting.
HPRG Handling Leasing and Marketing of 30K Medical Office Building
JBG's Tysons West, a 250k SF mixed-use project is rising next to the future Spring Hill station. JBG's Jay Klug tells us Phase 1 will deliver by fall 2013 with an urban-format Walmart (including full-service grocery), a 24 Hour Fitness, 9,000 SF of small-store retail, and 30k SF of medical office. It'll also include as many as 400 apartments. Future phases—subject to rezoning approval, Jay says—will have residential, more ground-floor retail, and office. HPRG is handling the leasing and marketing of the 30K Medical Office Building.
What Healthcare Reform Did
|Chuck Feitel, HPRG principal, says the market will stabilize once new healthcare regulations get sorted out. And that's why Chuck says the sector's future is rosy.|
Demand for medical services is strong, but providers aren't rushing to build. Yesterday at our first-ever Baltimore Healthcare Real Estate Summit, experts said healthcare reform's mandate for electronic records is eating up capital that might otherwise be spent on real estate. (Sheesh, leave some capital for the rest of the table.)
Johns Hopkins Medical Management Corp president Gill Wylie says converting to all-electronic medical records costs "hundreds of millions." As a result, real estate acquisition and development decisions are getting pushed down the priority list. What won't change is his hospital leasing lots of space around Baltimore: consolidation means more doctors (encompassing many specializations) are joining hospital systems, and those folks need to practice somewhere. (Unless they want to practice medicine in a van, like a medical food truck.) He thinks healthcare providers will integrate, so look for more partnerships between hospitals, a la Hopkins' JV with Anne Arundel Health System in Odenton.
HPRG principal Chuck Feitel says uncertainty over healthcare reform's impact means tenants are focused on short-term deals. They also want cheap rental rates and robust TI packages, which means leases are taking longer to get signed. To save money, many practices are moving to off-campus medical office buildings, which he labels a short-term fix. Future-focused doctors still dream of owning their own real estate, but it's hard find a developer willing to do medical office condos. The good news: the market will stabilize once new healthcare regulations get sorted out. And that's why Chuck says the sector's future is rosy.
Foulger-Pratt Rockledge Medical Properties prez Michael Abrams (right, with moderator Jim Kornick of NorthMarq) says smaller tenants are consolidating to form larger groups affiliated with hospitals, which gives developers an opportunity to forge stronger relationships with those hospitals. And well-performing assets are fetching premium prices in the investment sales market: Best in class properties routinely achieve cap rates in the low- to mid-6% range, and the Class-A market is dominated by national institutional players. In situations where new development makes sense, he says opportunities lie in off-campus buildings (the cost of care rises dramatically when you're on a hospital campus).
Washington Real Estate Investment Trust's Stephen Carboni says healthcare is more similar to retail than office: landlords need lots of communication with tenants, and it's important to learn the personality of each doctor. (Are they more of a Dr. House or a Dr. Quinn, Medicine Woman… or maybe a Doogie Howser?) And just like new retail projects, he says new medical office buildings need to be "where the density is"—in transit-oriented, mixed-use properties. Leasing space is the best option for most practices, he says, because buying a medical office condo limits growth potential. As for all those consolidations we keep talking about, he says his portfolio has benefited. Why? Increased creditworthiness and reduced risk.
Recently Sold Properties
|10,044 square foot building sold by Leonard Brown to Prosperity Pharmacy for a compounding pharmacy in March 2011 for $2.5 million. 2924 Telestar Court, Falls Church, Virginia||21,000 square foot building developed, renovated and sold by Leonard Brown to Cardiovascular and Thoracic Surgery Associates for $7.4 million in November 2006. 2921 Telestar Court. Falls Church, Virginia|
|9,600 Square foot Building sold by Leonard Brown to Orthopaedic Foot and Ankle Center for $2.3 million before renovation in March 2010. 2922 Telestar Court, Falls Church, Virginia||Two buildings, totaling 10,300 square feet sold by Chuck Feitel and Leonard Brown to Virginia Hospital Center in July 2010 for $3.5 million. 5232 Lee Highway, Arlington, Virginia|