CREJ - Healthcare Properties - July 2017
UCHealth recently broke ground on a more than $310 million hospital designed to bring innovative, leading-edge care and advanced medicine to residents in Highlands Ranch. UCHealth Highlands Ranch Hospital will span approximately 360,000 square feet – with an adjacent 85,000-sf medical office building housing a two-story cancer center. The full-service hospital will open with approximately 72 inpatient beds with room to expand. The six-story hospital, located at Town Center Drive, between Lucent Boulevard and Highlands Ranch Parkway, is slated to open in early 2019. “As construction begins at the site of the future Highlands Ranch Hospital, we look ahead with great anticipation to the unique and advanced health services we will be offering to this community and beyond,” said Diane Cookson, president and CEO of Highlands Ranch Hospital. “Every detail of this facility has been designed with patient care as the top priority so that we may provide the very best experience and best care for our patients.” The hospital will feature a birth center, including C-section operating rooms and Level II neonatal intensive care unit, intensive care unit, operating rooms, Level III trauma center and emergency department, advanced cardiac services, and complete imaging. UCHealth will partner with both community physicians and with the University of Colorado School of Medicine to provide care at Highlands Ranch Hospital. “UCHealth Highlands Ranch Hospital will operate under an ‘open medical staff model,’ which means that the physicians already practicing medicine in the community will be working alongside our University of Colorado School of Medicine faculty to offer patients a comprehensive approach to healing,” said Dr. Tom Purcell, chief medical officer of Highlands Ranch Hospital. “This collaboration along with our connection to the University of Colorado Cancer Center will offer patients access to advanced clinical trials and innovative treatments, right here in their backyard.” The new medical campus will occupy 33 acres of the newest Shea Properties development on the last vacant property in Highlands Ranch. The master plan for Central Park spans nearly 100 acres and is organized around a future public park, which will have an urban feel and will include a special art element. UCHealth is building on land owned by the Englewood McLellan Reservoir Foundation. Shea Properties and Shea Homes will complete the remaining portion of the development, with Shea Properties introducing a mix of 280 rental townhomes and apartments east of the retail village and Shea Homes introducing a single-family home community with 200 houses nearby. The health campus will generate a significant economic impact for Douglas and Jefferson counties, including 500 to 600 construction jobs at the site. UCHealth Highlands Ranch Hospital will provide approximately 400 permanent health care positions when it opens for an area of Colorado that is projected to increase by more than 25 percent by 2025. The hospital will have room to expand in the future as the needs of the growing community change. Mortenson Construction is the general contractor on the project and is supported by EYP Health, BSA LifeStructures, Datum Engineers, Gallun Snow, Affiliated Engineers Inc., Kimley Horn, The Lund Partnership, BHA Design Inc., RK Mechanical and Encore Electric. Fund acquires first Colorado MOB assets Anchor Health Properties, a national full-service leasing, management, development and investment firm focused on health care real estate, acquired a three-property portfolio of medical office assets in metro Denver on behalf of Chestnut Healthcare Partners. Chestnut Healthcare, a core health care real estate equity fund focused on the acquisition of medical office buildings, is co-managed between Anchor Health Properties and Chestnut Real Estate. The investment marks the fund’s first foray in Colorado as Anchor Health Properties continues its expansion into the Western United States. The portfolio included Cherry Hills Medical Plaza, 3535 S. Lafayette St. in Englewood, 21,605 square feet; and Highlands Ranch Medical Plaza I at 9330 S. University Blvd. and 9331 S. Colorado Blvd. in Highlands Ranch, 22,365 and 17,723 sf, respectively. According to public records, the portfolio sold for $18 million. “We are excited about the opportunity to acquire several best-in-class outpatient medical projects in the Denver marketplace as directly owned investments in our Chestnut Healthcare Partners Fund,” said James Schmid, chief investment officer of Anchor Health Properties. “The high growth demographics of the Denver area lend themselves well to increasing medical services. The barriers to entry in the building submarkets and proximity to key medical demand drivers should further enhance the investments over time. We hope to build on this portfolio to pursue other medical acquisition and development opportunities across Colorado.” Capital One provided secured debt financing for the transaction. RealSource Group facilitated the sale on behalf of the seller, Dick Siegert of Foothills Real Estate, who developed the buildings. Lakewood medical office building trades for $2.19M A Lakewood medical and general office building recently sold to R.W. Properties LLC. The buyer paid $2.19 million, or $143.29 per square foot, for the 15,284-sf building at 10895 W. Asbury Ave. MJB Management LLC sold the building. It was represented by Joshua Cohen of John Propp Commercial Group. The buyer was represented in the sale by Mark Wilson of Commercial Property Advisors. The building, situated on a 1.3-acre site, is home to tenants that include several dentists, an audiology center and other professional services. Hammes explores ambulatory network of the future Hammes Co. President and Chief Operating Officer Chris Kay recently outlined planning principles for an ambulatory network of the future in which health care is delivered to achieve better outcomes while using resources more efficiently in a white paper. The paper emphasizes that as health care leaders plan for the future, they must create a flexible built environment that supports an effective and adaptable strategy rooted in five planning principles: thinking beyond the primary service area, adopting a design-neutral approach, making room for virtual care, using predictive analytics for site selection and building for access and efficiency. “The Hammes concept of a future ambulatory network encapsulates our understanding of how health care systems can thrive in the ever evolving health care environment,” said Kay. “This ambulatory network of the future is a strategic planning model that accounts for the deep trends reshaping the health care industry, and the true center of health care delivery will soon be a coordinated network of ambulatory care points.” Key points from the paper include: • Thinking beyond the primary service area. The ambulatory network of the future is the hub of a care delivery system, and health care leaders must broaden their geographic focus and think beyond their existing primary service areas as a result. By thinking in terms of population health, health care systems can identify the total health and wellness needs of people in a region and the types of care delivery solutions the network should include. •Adopt a design-neutral approach. Meeting today’s needs while also aligning with the ambulatory network of the future requires an adaptable design. This design-neutral approach ties into a flexible and operationally neutral template that adapts to new technologies, scientific advances and novel delivery processes as they evolve. •Make room for virtual care. Virtual care, still in its early stage, requires a complex balance of traditional site-based care and virtual care requirements. Virtual care will reduce or change the need for many clinical spaces, including exam rooms, as the concept gains acceptance and increases in popularity. An increase in the use of virtual care also will lessen the demand for facilities for specialty care, with dermatology and psychiatry at the forefront. •Use predictive analytics for site selection. Predictive analytics use rich data sets to model complex consumer demand and individual behavior. These tools help leaders understand regional patient populations and plan access points within an optimal ambulatory network. •Build for access and efficiency. Patient-centric health care requires access and efficiency at all touch points throughout the care continuum. Design and process must work in tandem to ensure easy access, short wait times and quick throughput, potentially in a hybrid medical office or clinical research building that allows physicians to add their greatest value to the ambulatory network. Gershman Mortgage arranges financing Gershman Mortgage recently arranged and closed a financing structure for a medical office building at 36 Steele St. in Cherry Creek. It was the second leg of a previously closed purchase and renovation of the space completed in 2016, where two prominent plastic surgeons were brought together in a single space. The new financing facility provided just over $6.5 million of combined permanent fixed-rate debt. “The appreciation of medical office space in desirable and constrained districts such as Cherry Creek continues to appreciate rapidly in the Denver market. We were able to leverage the existing practices’ strength to boost the combined loan to value and provide higher permanent loan proceeds at an attractive rate and term,” said Michael Thomas, vice president of Gershman Mortgage. Healthcare Trust closes on Duke Realty’s medical assets Healthcare Trust of America Inc. closed on its previously announced $2.75 billion acquisition of Duke Realty’s medical office assets, which included four Colorado properties, and the medical development platform of Duke Realty Corp. Included in the acquisition were SCL Health facilities in Aurora, Northglenn, Littleton and Westminster. HTA is the largest dedicated owner and operator of medical office buildings in the United States. “This transaction solidifies HTA as the dominant owner and operator of medical office buildings located in key, gateway markets in the United States,” added Chairman and Chief Executive Officer Scott D. Peters. MorningStar of Wheat Ridge changes hands Harbert Seniors Housing Fund I LP acquired a pair of senior living communities, including MorningStar of Wheat Ridge. Confluent Senior Living, a subsidiary of Denver-based real estate investment and development firm Confluent Development, sold the Morningstar of Wheat Ridge and MorningStar of Albuquerque communities for an undisclosed price. Confluent Senior Living co-developed each community with its operating partner, MorningStar Senior Living, which will continue as operator of both properties. Holliday Fenoglio Fowler brokered the deal on behalf of the new owner. Located at 10100 W. 38th Ave., MorningStar of Wheat Ridge comprises 58,000 square feet. The development, completed in March 2016, features 64 assisted living and memory care suites. It was fully leased by February and is 96.9 percent occupied. “We’re thrilled with the successful sale of two quality senior living assets,” said John Reinsma, managing director of Confluent Senior Living. “These sales represent the strength of our senior living portfolio, with the projects fully stabilized and primed for a smooth transition of ownership fewer than 12 months after completion.” The Wheat Ridge and Albuquerque communities represent Confluent’s first sale of senior living assets to Harbert Seniors Housing Fund. The HFF investment sales team was led by senior managing directors Ryan Maconachy and Chad Lavender. HFF’s debt placement team was led by director Sarah Anderson. Harbert Seniors Housing Fund I LP is sponsored by Harbert Management Corp. HMC, together with its sponsored funds, owns, develops and manages multifamily, office, industrial, retail and self-storage properties throughout the United States. Pathfinder Partners says hello to Shalom Village Pathfinder Partners, a San Diego-based firm specializing in opportunistic and value-add real estate investments, paid $16.13 million for a 104-unit independent living community within the Shalom Park Senior Living Campus, a nonprofit rental continuing care retirement community at 5240 Park Circle in Aurora. Pathfinder partnered with Hillcrest Development Group LLC, a Denver-based company with experience in operating senior communities, on the acquisition. The community, Shalom Village, which Pathfinder will rebrand as V-Esprit, is situated on approximately 15 acres and comprises 60 apartments and 44 patio homes averaging 1,050 square feet. The property was acquired from Shalom Park, the Colorado nonprofit organization, which owns the balance of the Shalom Park Senior Living Campus. V-Esprit residents will have shared use of the campus amenities, including the wellness center, exercise facilities, salon, bistro, swimming pool and spa. Additionally, the new ownership plans to invest $3 million into the renovation of the community, including converting four of the one-bedroom apartments into a clubhouse and cardroom, and renovating and modernizing the theater room, library, communal dining area and leasing office. Pathfinder also plans to renovate the apartment interiors to include new hard surface countertops, flooring, cabinets and appliances as well as update all finishes, fixtures and paint, according to Mitch Siegler, senior managing director of Pathfinder Partners. Siegler noted the property marks the company’s first senior living acquisition and was an appealing buy on multiple levels. “The community is ideally located in a beautiful, peaceful setting just 15 miles south of downtown Denver. Colorado continues to be a highly desirable submarket for Pathfinder, and V-Esprit represents another terrific value-add investment opportunity.” Blueprint Healthcare Real Estate Advisors’ Pamela Pyms and Hayden Behnke were the lead advisers on the transaction and positioned the offering as either a value add or conversion play. The community sold above original asking price. Haverland acquires Ralston Creek Senior Living facility Haverland Carter LifeStyle Group, a mission-driven, faith-based New Mexico nonprofit, purchased the Ralston Creek Senior Living facility at 11825 W. 64th Ave. in Arvada. Formerly a for-profit community, the name will be changed to Ralston Creek Neighborhood and will become a nonprofit assisted living and memory care affiliate of Haverland Carter LifeStyle Group. “This acquisition is in perfect alignment with HCLG’s not-for-profit mission of offering senior housing and health care options,” stated E. DeAnn Eaton, the CEO of HCLG. “The experienced leadership of HCLG will benefit the residents and employees of Ralston Creek Neighborhood.” “Our focus, as we evaluate opportunities presented to us, is to protect our assets while we grow business,” Eaton added. “This project met our goals as it offers no construction risks, excellent design and an ideal location in an expanding market.” “Certainly going into Colorado has us expanding our geographic presence, but also has us diversifying by adding another freestanding assisted living community to our existing Life Plan Communities,” Eaton said. “Our strategic plan is to seek new opportunities to provide care and services beyond our existing boundaries.” HCLG also operates two Life Plan Communities (continuing care communities) in New Mexico and an assisted living and memory care community in Oklahoma City. Milestone Retirement Communities sold the center for $46.95 million, according to public records. It opened in 2016. LGBTQ community planned in Louisville Elisabeth Borden, principal of The Highland Group Inc., is heading up a group of Boulder County near-retirees who are planning an intentional living community targeted to LGBTQ people, friends and family age 50-plus. The community is envisioned as an accessible, low-maintenance setting. The 12-unit condominium building will be located in Louisville and comprise two-bedroom, two-bath condominiums of 1,133 square feet. The elevator-served building will include residences with private garages and lofts. A 12-month construction period is expected with move-ins around late 2018. Pricing is anticipated around $400,000 to $430,000 and some units may be available on a rental basis.