CREJ - Journal

35 / 76

January 21-February 3, 2015 — COLORADO REAL ESTATE JOURNAL — Page 3AA
by Jennifer Hayes
Healthcare Trust of America
Inc. recently purchased the
Lone Tree Medical Plaza for
$24.25 million, or more than
$344 per square foot, according
to public records.
The three-story medical
office building, located at 9695
S. Yosemite Drive in Lone Tree,
comprises 70,470 sf.
Constructed in 2007, the
building features covered park-
ing, covered patient drop off,
gurney-sized elevators, anti-
vibration floors, column-free
spaces and redundant HVAC.
It also is near Sky Ridge Medi-
cal Center, Interstate 25 and
C-470, the Lincoln light-rail
station and Park Meadows.
The Class A building is
leased to a variety of physician
groups and was reportedly
around 95 percent occupied at
the time of sale.
Lone Tree Medical Plaza LLC
sold the building.
“The interest was very high
from multiple groups,” noted
Michael Bennett of HFF’s Chi-
cago office, who listed the
property with HFF’s Mary
Sullivan and Josh Simon and
Jan Friedlander of Friedlander
Commercial Real Estate LLC.
Friedlander also was an inves-
tor in building and the leasing
agent for the building.
The publicly traded real
estate investment trust
declined to comment on
the acquisition, noting only
in a press release regarding
investments in core medical
office buildings in 2014 that it
acquired two assets in Douglas
County, one mile from its Lin-
coln Medical Center.
Other News
n URDA LLC, a private
investment entity, purchased
a single-tenant medical office
building in Fort Collins for
$2.75 million, or $234.04 per
square foot.
The 11,750-sf building at 3702
S. Timberline Road was sold
by CFG Real Estate LLC and
represented by Stuart Thomas
of Cassidy Turley Commercial
Real Estate.
The property, which wasn’t
on the market at the time of
the sale, is fully occupied by
Centers for Gastroenterology.
Brian Mannlein, also of Cas-
sidy Turley, represented the
buyer in the acquisition of the
building.
n Seavest Healthcare Prop-
erties LLC recently announced
it finalized a lease with Lit-
tleton Adventist Hospital to
build a full-service outpatient
cancer center on the campus
of the Littleton Adventist Hos-
pital.
The 10,500-sf space will be
located in the Arapahoe Medi-
cal Park Plaza II medical office
building at 7750 S. Broadway.
The space is expected to be
complete in the third quarter
of 2015.
Fleisher Smyth Brokaw is
a joint venture partner with
Seavest in the building and
serves as leasing agent and
construction manager. Fleisher
Smyth worked with Littleton
Adventist on the design and
development of the cancer cen-
ter plans and will oversee the
construction of the project.
The center will feature a
patient and family waiting
area, exam rooms, changing
rooms, offices, an elaborate
control room and a high-tech
conference room.
It will occupy the entire first
floor of the building. Two new
concrete radiation treatment
vaults also are being built and
attached to the building.
Littleton Adventist studied a
number of options for deliver-
ing cancer care services and
converting the first floor of
Arapahoe Medical Park Plaza
II to a cancer center allowed
the hospital to move quickly
and on a cost effective basis.
“We worked closely with
the hospital to make this solu-
tion viable and cost effective.
It is keeping within our stated
mission of collaborating with
our hospital partners to reach
solutions that allow them to
be most effective in their mar-
ketplaces. This is a positive
addition to the hospital, the
community and the building,”
said Jonathan L. Winer, chief
investment officer of Seavest.
n Westfield Co. paid $2.14
million for 3.02 acres of vacant
land located at the northwest
section of Lincoln Avenue and
Park Meadows Drive in Lone
Tree.
Denver United Land
LLC sold the parcel, one of
the last remaining parcels in
ParkRidge Corporate Center,
the 75-acre mixed-use business
park at the northwest corner
of Lincoln and Interstate 25. It
was represented in the sale by
Rick Egitto and Peter Coakley
of Inverness Properties.
It is anticipated that West-
field will develop an approxi-
mately 42,000-sf medical office
building at the site, immedi-
ately north of Kaiser Perman-
ente’s Lone Tree Multi-Special-
ty medical center.
“We have been fortunate to
be involved with the Lone Tree
market since 2003, watching
it grow into the current busi-
ness powerhouse on the south-
ern end of the Denver metro
area. With five hospitals, the
Charles Schwab campus, the
Lone Tree Arts Center, Park
Meadows mall and the Lincoln
light-rail station, all within five
minutes of the site, we knew
demand would be strong,”
said Rob Hess, of the selling
group. “Not being developers,
bringing a quality group such
as Westfield to the table, with
their Douglas county expertise
evidenced by all that they have
accomplished around the Lin-
coln light-rail station, would
provide medical users the
needed development expertise
to add a new MOB to the mix.”
n Pensa Colorado LLC
acquired a Colorado Springs
medical office condo for
$470,000, according to public
records.
The buyer purchased the
2,184-sf condo at 8540 Scarbor-
ough, No. 370, one mile from
Interstate 25 and off Research
Parkway.
The unit was constructed in
2007 and features “multiple”
upgrades.
David A. Richman Living
Trust sold the unit and was
represented by John Witt
of NavPoint Real Estate
Group.s
Healthcare Trust of America Inc. acquired the Lone Tree Medical Plaza for more than $344 per square foot.
If you have been sitting
on the sidelines waiting
to look for new medical
office space, brace yourself to
hear some bad news: There’s
not much left to choose from.
A once abundant supply of
prime medical office space in
Colorado Springs has withered
away due to popular demand.
Several large, vacant medical
office buildings were readily
available to lease just a couple
of years ago, but demand was
high and now only a few desir-
able spaces remain.
Landlords of multiple Class
A medical office buildings in
northern Colorado Springs
aggressively filled these unoc-
cupied spaces, which leaves
current potential lessees anx-
ious to choose among fewer
options. Recent leasing statis-
tics show that in the last 36
months hundreds of thousands
of square feet of medical office
space have been leased. Vacan-
cy in the Class A medical office
market was once a whopping
25 percent and is now only 6
percent.
This enormous surge in
demand for space has been
prevalent throughout the
northern Colorado Springs
area. The Bri-
argate Medi-
cal Pavilion
b u i l d i n g s ,
located at
4105 and
4125 Briar-
gate Park-
way, have
leased space
to numerous
large medi-
cal tenants,
i n c l u d i n g
Ch i l d r e n ’ s
H o s p i t a l ,
Kaiser Permanente and Front
Range Orthopedics. Each of
the two buildings has 85,000 sf
and now only a total of 18,000
sf is available for lease. The
117,000-sf medical office build-
ing on the campus of Memorial
North Medical Center is now
92 percent occupied because
of its recent 30,000-sf lease to
Colorado Springs Orthope-
dic. Other medical buildings,
such as Chapel Hills Medi-
cal Center, have seen similar
leasing activity. This 62,000-sf
building located at 595 Chapel
Hills Drive is now 88 percent
occupied. Over 19,000 sf of the
building has been leased since
the start of 2014.
This market segment has
seen equally high demand
by those who are seeking not
only to lease but also to pur-
chase buildings and land. The
properties at 9320, 9348 and
9362 Grand Cordera have all
been recently purchased or
are currently under contract,
illustrating increased sales
activity. Dr. James Lee recently
purchased 9320 Grand Cordera
with Alliance Urgent Care. In
July, Dr. Vin Chung purchased
a 16,000-sf unit in the 9348
Grand Cordera building. The
9362 Grand Cordera building
is now under contract for pur-
chase and was the last large
block of medical office space
left in this part of Colorado
Springs. I am confident it will
either be leased or sold again
to a third party in the next six
to 12 months.
All of this activity has led
to rising lease rates for medi-
cal office space. Less than
two years ago, an established
medical practice could have
obtained a build-out allow-
ance equal to $60 per sf with
a lease rate of $13 to $14 per sf
triple net over 10 years. Seeing
this increasing demand caused
landlords to pull back. Now,
they are offering only a $40 per
sf allowance and a rental rate
of $15 to $20 per sf triple net.
In many other instances, land-
lords are holding onto their
vacant spaces and waiting for
the right, large-footprint ten-
ants.
Are you ready for the good
news? There may still be time
to secure your future with a
prime office space location.
Starting now and continuing
into the near future, aging
baby boomers will predict-
ably require more health care.
To serve the increasing medi-
cal needs of this fast growing
demographic, the north and
east sides of Colorado Springs
will be prime locations for
medical offices. With demand
only increasing and far out-
pacing supply, savvy invest-
ment groups and developers
will purchase available land
in these locations to construct
medical office buildings. These
sites, however, will not stay
on the market for very long.
In fact, they are already being
scooped up. Veritas Manage-
ment Group recently acquired
ground off of Powers Boule-
vard, just north of Woodmen
Road, to build an 80-bed reha-
bilitation facility. Boldt Devel-
opment, a Milwaukee, Wiscon-
sin, developer, is planning to
construct a 70,000-sf medical
building adjacent to St. Francis
Medical Center.
We at Cascade Commercial
Group predict 2015 will be
a time of medical users and
developers snatching up the
remaining ground parcels.
Other developers will be con-
templating building specula-
tive medical space in 2016. s
Ted T. Link
Broker/owner,
Cascade Commercial
Group, Colorado
Springs
Health Care
This market
segment has
seen equally
high demand
by those who
are seeking not
only to lease
but also to
purchase
buildings
and land.
“We worked closely
with the hospital to
make this solution
viable and cost
effective. It is
keeping within our
stated mission of
collaborating with
our hospital partners
to reach solutions
that allow them to be
most effective in their
marketplaces.
– Jonathan L. Winer, Seavest