September 2016 — Health Care Properties Quarterly —
Page 5
3855 Lewiston Street, Suite 100
Aurora, CO 80011
COL LABORATORS . TH I NKERS . BU I LDERS .
ST. LOUIS
│
DENVER
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KANSAS CITY
(303) 657-9700
At Brinkmann, we utilize a unique blend of creativity, a passion for problem-
solving, and a dedication to client service to transform good projects into great
ones. We carefully approach each and every project to develop solutions that
save our client’s time and money and earn their trust resulting in long-lasting
relationships.
With
mainstreet property group
, our relationship started with
the
healthcare resort of shawnee mission
and nowwe are proud to lead the
construction of six additional health care facilities for
mainstreet property
group
throughout the Midwest, including
mainstreet health & wellness
suites
in Aurora, Colorado.
BUILDING LASTING RELATIONSHIPS
Market Update
T
he Colorado Springs’ medical
office market has been very
active over the past couple of
years and is currently seeing
a few notable trends that will
have long-term impact in the overall
marketplace.
University of Colorado Health took
over the city-run Memorial Hospital
in a long-term lease agreement in the
third quarter of 2012. That transac-
tion added tremendous stability to the
overall marketplace and community,
as well as formidable competition to
the well-established Centura Health
hospital systems in town. In addi-
tion to acquiring several independent
local practices and strengthening the
network and scope of the system, the
UCH brand has brought increased
legitimacy to the health care systems
in Colorado Springs.While this mar-
ket stands strongly on its own, the
network and connection to Denver
and the rest of the state has fueled
increased expansion and growth.
Another factor in the market that
will have a long-term impact is that
since the 2008 downturn, most of
the speculative medical office build-
ing product has been leased and
there is currently no product under
construction on a speculative basis.
There are a handful of products either
on or near the northern campus of
St. Francis and Memorial North that
likely will break ground in the next
12 to 36 months. However, until they
do, we will see compression in the
market from a vacancy standpoint
and increases in lease rates, which
have remained fairly flat for the past
five years (see vacancy chart indicat-
ing a current 9.56 percent vacancy
and average lease rate chart showing
a current average
MOB lease rate of
$16.21 per square
foot).
Lastly, CHI, UCH
and Children’s Hos-
pital Colorado have
announced future
development of
ground-up projects
slated for delivery
over the next 36
months. CHI is add-
ing 134,000 sf onto
the existing St. Fran-
cis Hospital with
additions to the
emergency room,
operating room and intensive care
facilities. Construction is estimated to
be complete in 2018.
Memorial and Children’s Hospital
are breaking ground this month on a
combined project with a $200 million
budget on Memorial’s 100-acre North
Campus. The new Children’s Hospital
will include 98 patient rooms, 20-plus
emergency room beds with room for
up to 10 beds to be completed later,
eight operating rooms, a sleep study
lab, and 10 to 12 beds and exam
rooms for inpatient and outpatient
cancer treatment. Memorial's 130,000-
sf addition will include 20 inpatient
beds, eight exam rooms in the emer-
gency department and two operating
rooms; it will primarily house women
and oncology services to accommo-
date a significant increase in inpatient
admissions and number of outpatient
visits.
We anticipate future on- and off-
site growth of additional facilities
and continued tightening of the
competitive MOB market into the
foreseeable future.
The historical perception in the
Colorado Springs medical market was
that the city played a distant second
to Denver’s market. The investment
being made by all of the major provid-
ers in Colorado Springs sends a dis-
tinct message that
that
has changed.
s
Peter Scoville
Principal,
Colorado Springs
Commercial,
a Cushman &
Wakefield Alliance,
Colorado Springs
