March 2-March 15, 2016
—
COLORADO REAL ESTATE JOURNAL
— Page 15B
Many new construction
projects offer residents greater
access to a wide range of health
care services. For example,
the SCL Health Community
Hospitals are located in
residents’ neighborhoods
and are smaller than typical
hospital campuses but offer
the same type of health
care services. This includes
emergency medical care, labor
and delivery services, inpatient
care, a wide range of surgical
procedures, on-site laboratory
and radiology services and
other comprehensive services.
Investors are bullish.
Investors continue to be
interested in Denver area
medical properties. In the
past 12 months, there were
a number of large sales
transactions, led by the
444,209-sf Anthem Building,
which sold for $70 million,
and the 56,349-sf The Urology
Center of Colorado, which sold
for $35.2 million.
It is anticipated that investor
interest will continue in 2016
and beyond because of the
health of the local market and
a shift in the buyer landscape.
It’s a competitive environment
and there are more buyers
than ever, including new
sources of capital such as
private equity, real estate
investment trusts, retailers
and employers investing in
networks.
Consistent demand results in
increased lease rates.
Health
systems, hospitals and physician
groups are demanding more
high-quality medical facilities
in the Denver area. However,
there is limited quality space
available, which is driving up
lease rates.
By the end of last year,
according to CBRE, overall
direct asking lease rates
reached $27.43 per sf full-
service gross, an increase
of 2.7 percent for the year.
On-campus lease rates were
$30.18 per sf FSG (up 3
percent), and off-campus lease
rates were $26.21 per sf FSG
(up 1.7 percent).
Growth and positive
environment will result in
increased activity.
Many real
estate experts expect that
medical facility construction
and investment in the Denver
market will continue at a
healthy pace well into next
year for a number of reasons.
The area has excellent
population growth and
consistently is ranked as one
of the fastest-growing areas
of the nation. Between 2004
and 2014, area population
grew by 1.5 percent. By 2040,
it’s predicted that more than
7.7 million people will live in
Colorado, an increase of nearly
3 million people since 2004.
The Denver/Boulder area
also has a low unemployment
rate and continues to add
new jobs, including nearly
8,400 health care and wellness
jobs in 2015. As of last fall,
the seasonally adjusted
unemployment rate in the
Denver/Boulder metro area
was 3.5 percent, below the
overall Colorado rate of 3.8
percent and well below the
national rate of 5 percent.
The Denver market also
consistently receives high
marks in a number of areas
from national organizations
and publications. In their
Emerging Trends in Real Estate
2015, the Urban Land Institute
and PricewaterhouseCoopers
ranked Denver fourth out of
75 cities in the categories of
investment, development and
homebuilding.
In summary, Denver’s
favorable demographics,
low unemployment, and
positive living and working
environment, plus its
reputation as a national leader
in innovative technology and
health care, should continue
to fuel increased health care
real estate activity in the years
ahead.
with items from any faith.
Craig’s PEAK Community
Outpatient Rehabilitation
Center doubled in size and
now features technology in the
space. The floor of the therapy
pool functions as an automated
lift so that clients and patients
in wheelchairs can be lowered
into the pool, eliminating the
need for a separate transfer lift.
Although the footprint of
Craig has expanded from
135,000 to 220,000 square feet,
the patient capacity remains
the same because the new
facility now offers private suites
with ample space for family to
visit and confer with physicians
and the rehabilitation team.
Reu said that the only pieces
remaining to be completed
are Craig’s outpatient clinic,
outpatient therapy center,
resident doctor’s office,
and kitchen and servery
renovations at the main
cafeteria.
Trends
Craig
It’s a competitive
environment and
there are more
buyers than ever,
including new
sources of capital
such as private
equity, real
estate investment
trusts, retailers
and employers
investing in
networks.
