PITTSBURGH-Healthcare Trust of America, Inc. (HTA) is acquiring the West Penn Allegheny Building here for $41.34 million. The Allegheny General Hospital (AGH) is a current tenant, taking 31,000-square feet, however it intends to occupy 100% of the property. HTA is a non-traded real estate investment trust which specifically targets medical office and healthcare-related assets.

AGH holds a 15-year master lease for the entirety of the six-story class A office. Spanning 228,870 square feet, the building was constructed circa-2003 for multiple tenants. The AGH is a 724-bed hospital located roughly one-mile from the West Penn Allegheny Building.

“This is an opportunity to acquire a well-located, long-term stabilized asset that will be integral to AGH’s corporate operations,” says Mark D. Engstrom, EVP of acquisition for HTA, in a statement. The close of the purchase is dependent upon “satisfaction” of a number of unnamed conditions, says Scottsdale, AZ-based HTA. There lease rates are not quoted by HTA, but Cushman & Wakefield’s 2Q10 market report notes office rates in the low-20s per square foot. HTA did not respond to GlobeSt.com inquiries by deadline.

[globest.com]

Five minutes from the main headquarters of the Palm Beach County Sheriff’s Office, employees of the Florida law-enforcement agency can, at no cost to them, swiftly see a doctor in a new medical center equipped with gun lockers and space to doff boots and bullet-proof vests.

If the physician prescribes medicine, an officer can leave with drug in hand.

The two-month-old West Palm Beach medical office, operated and staffed by health insurer Cigna Corp. (CI) solely for the sheriff’s department’s 4,100 employees, reflects a growing interest among employers in improving employee access to health care and offering services aimed at improving overall health and productivity.

Interest in such facilities may intensify as some 32 million uninsured Americans are poised to gain coverage in the next few years under the new health overhaul, exacerbating what many experts see as a growing U.S. physician shortage that can hinder access to good medical care and lengthen waits to see a doctor.

“I would expect the primary-care shortage to worsen,” said Thomas Richards, Cigna’s senior vice president for U.S. products and leader of the insurer’s implementation of the health overhaul law. In response, some large employers are considering putting clinics on site, according to Richards.

“I think that trend will grow as employers look at employees needing to take time off to sit and wait for a doctor,” he said.

Cigna runs 22 employer health centers ranging in services from health-coaching to primary care, and provides a workplace health center for its own employees.

Drug-store chain Walgreen Co. (WAG), the industry leader in workplace health services after buying the two largest site operators in 2008, runs some 380 centers that vary in scope from fitness centers to pharmacies to nurse-practitioner or physician care. More than half are staffed by physicians, according to Peter Hotz, group vice president for Walgreen’s health and wellness division.

While the recession dampened growth following the purchases, in the last 12 months “we’ve seen demand pick up quite a bit because companies realize that these services save them money, both in the short term and in the long term,” Hotz said. Walgreen has seen growth across the board, he said, including a healthy uptick in physician-directed sites.

Walgreen, with such workplace health-center clients as Walt Disney Co. (DIS) and Toyota Motor Corp. (TM), expects to see steady, double-digit percentage growth in the number of sites, Hotz told Dow Jones Newswires.

“There is a concern about the shortage of primary-care physicians,” he said.

A Walgreen spokesman cited a 2008 Fuld & Co. research paper that estimated onsite clinics then served 4% of people under age 65 in the U.S., and predicted they will serve more than 10% of that population by 2015. Fuld reported that 24 vendors then were managing some 2,200 clinics for 1,200 clients, and said such centers can cut employers’ health costs.

Walgreen clients pay for the costs of running the facilities, plus a management fee, so there’s no incentive for doctors to see a certain number of patients. That aligns the interests of the facility with employers, Hotz said. Some clients provide health-center access for dependents as well as employees.

Read More

[online.wsj.com]

Managed by Dunn Twiggar Company, Bethlehem-based DTC 479 TJW LP is presumably the commercial real estate project citybiz real estate covered on Tuesday, a 50,000 square foot medical office building purchased by Dunn Twiggar at 479 Thomas Jones Way.

Dunn Twiggar Company LLC, together with its affiliate Dunn Twiggar Property Advisors LLC, is a commercial real estate firm headquartered in Bethlehem, Pa. The firm was founded in 2005, by Ryan Dunn and Andrew Twiggar.

Dunn formerly worked at Philadelphia commercial real estate company The Rubenstein Company, LP, and later joined Dunn-Noble Development Company, LLC as a development manager.

Twiggar formerly worked at a regional industrial real estate development company, after stints with two business consulting firms, and as a manufacturing and design engineer for a local manufacturer.

According to the filing, the parent company received $78,000 as finder’s fees.

[phillyrealestate.citybizlist.com]

Richmond Honan acquires, owns, manages and develops medical-office buildings. The company will hold equity interests in 29 medical-office buildings in 10 states when the offering closes. Its initial properties have 1.5 million of leasable square feet and had an occupancy rate of approximately 89% as of March 31.

The company plans to apply for listing on the New York Stock Exchange under the symbol MOB.

Owners and operators of health-care facilities have been less hurt by the woes in the real-estate sector, as their operations are generally less cyclical. But there have been recent signs that insured Americans are using fewer medical services, raising questions about whether patients are consuming less health care as they pick up a greater share of the costs.

Richmond Honan swung to a first-quarter loss as overhead costs soared 76% and revenue edged down 0.2%. When considered as if its Affiliated and Ziegler portfolios were held from January 2009, the loss was even wider, though revenue more than quadrupled.

Richmond Honan also plans to use proceeds to purchase the real-estate operations of those portfolios, to repay debt and for other purposes.

Mercy Medical Center is expanding in an unconventional way as it braces for health care reform; it’s taking over a grocery store.

As demand for health care services increases — especially in primary care — Mercy, like other hospitals, is rethinking how it does business. The Baltimore hospital is adding new family medicine offices, called Lutherville Personal Physicians, to a shopping center at York and Ridgely Roads to accommodate more patients.

The new space, a 40,000-square-foot former Giant Food store, will be converted into a medical facility that will house exam rooms, lab services, diagnostic X-ray testing and a Dexa scan, a process for measuring bone density. The building will have room for 15 primary care providers, including eight or nine primary care physicians, and will be equipped to serve 120,000 patients annually. Mercy has a similar medical center in Overlea, a renovated 30,000-square-foot supermarket, that sees 100,000 patients yearly.

While this center is scheduled to open by April, Mercy also plans to launch five more of these community-based medical centers during the next five years.

“Our goal is to ultimately ring the Baltimore beltway,” said Thomas Mullen, president of Mercy Health Services.

Baltimore-based Whiting-Turner Contracting Co., was selected as the general contractor for the project. Mercy officials did not release the cost of the project.

Dr. George Lowe, medical director for the project, said the location of the new building was based off a need for primary care services in Baltimore County. “We go where we can organize a critical mass of primary care services,” Lowe said.

The expansion is also part of Mercy’s effort to become a patient-centered medical home, a model that focuses on the patient and emphasizes quality of care rather than volume of patients.

The idea of a patient-centered medical home is starting to catch on across the state, but few medical systems have taken decisive steps to restructure themselves in this way. Even fewer hospitals — and none in the Baltimore region ­— have taken over such large commercial spaces.

All of Mercy’s specialty care doctors will also rotate through the center, making it easier for patients to see a specialist.

Even though Mercy has been expanding for a few decades ­— with the addition of community medical centers in Overlea and Reisterstown — the new building is very much a side effect of health care reform.

“As more patients get insurance, they’re going to need access to primary care,” said Gary Michael, senior vice president for marketing at Mercy.

Other hospitals in the region have expanded to commercial spaces recently but didn’t use the same model as Mercy.

[bizjournals.com]

Stratfield residents concerned about the Jewish Home for the Elderly’s proposal to change town zoning regulations to allow for an expansion have another development to be concerned about.

Ray Rizio, a Fairfield attorney, filed plans in the town’s Zoning Department that call for the construction of a two-story, 25,000-square-foot medical building on 2.2 acres at 5545 Park Ave. in Fairfield.

Samuel Boyarsky, president of the Stratfield Improvement Association, said neighbors opposed earlier, larger versions of the proposed medical building and remain opposed to it today.

Boyarsky said the medical building planned by Rizio, Dr. Robert Russo and Philip DeGennaro would cause traffic problems and be built on land zoned for residential use.

Rizio told the town’s Economic Development Commission in April that his clients, who purchased the former Golf Digest building across the street and converted it to medical offices, would install a traffic rotary to improve traffic circulation, but Boyarsky said he heard that before. “They said they would have one installed for the one across the street, the Golf Digest building, and they never did that,” he said.

Rizio didn’t return a call for comment.

The proposed medical building, which Rizio said in April would house medical offices, requires approval from the Town Plan and Zoning Commission. The date of a public hearing hasn’t been set.

Rizio, Russo and DeGennaro would demolish a single-family house now on the 2.2-acre property, owned by the estate of Alphonse Bobowick, and build the medical office building in its place. The zoning application describes the building as a “hospital,” but Mark Barnhart, director of the town’s Office of Community & Economic Development, said that probably isn’t an accurate term because he doesn’t believe the building would include rooms for people to convalesce after surgical procedures.

Rizio, in the zoning application, says the 2.2 acres is in a residential zone, but doesn’t abut single-family homes and fronts on a major roadway. “Due to the property’s easy access to a major highway and direct access on a major roadway, the property is uniquely situated for its hospital use,” he states in the application.

Barnhart said the Economic Development Commission was receptive of the proposal in April but wanted more information. He said the commission would talk about the proposed development in September. “The commission was generally receptive of the idea and supportive of the proposed use. It does have the advantage of good access off the Merritt Parkway, and you have other properties nearby similar to their use,” he said.

Barnhart said Rizio told the commission in April that the rotary would lead to “an improved level of service” for traffic, increasing it from a level of service “E” to a level of service “B.”

Rizio said in April that his clients intended to build either a 14,000-square-foot medical building or 25,000-square-foot medical building. The larger version would be affiliated with Bridgeport Hospital, according to Rizio’s presentation to the commission in April.

The town’s Zoning Board of Appeals rejected the medical building in 2006 when it was proposed at 48,000 square feet. Rizio’s clients no longer need variances to town zoning regulations because the size was reduced to 25,000 square feet.

[fairfield.patch.com]

FREDERICK — Two huge regional hospitals in northern Colorado — Longmont United Hospital and Poudre Valley Health System in Fort Collins — said Monday that they will jointly build a medical campus for underserved southwest Weld County.

The 70-acre complex is planned for the northeast corner of Interstate 25 and Colorado 52 in Frederick.

“The campus will fill a need for convenient medical services that have been absent in our area,” said Mayor Eric Doering. “Our area will also benefit from new job opportunities and economic growth.”

A site master plan for the campus will be under development until late fall. The campus size and cost have not been determined, said Longmont United spokeswoman Karen Logan. The first building to go up is expected to be an urgent care center, followed by other medical buildings.

Mitchell Carson, Longmont United’s president and chief executive, said rapid growth in southwest Weld demanded that a high-quality medical facility be developed there.

“We’re focusing first on meeting the area’s most critical need,” Carson said, “and our early assessment indicates that need is urgent care.”

The campus will serve Frederick, Firestone, Dacono, Erie and rural areas — a region with about 60,000 residents — as well as commuters along I-25 and tourists.

St. Anthony North Hospital is also making a play for business in that corridor. Spokeswoman Jenny Bertrand said the hospital has plans for a medical office building, free-standing emergency department and outpatient imaging center at I-25 and 144th Avenue in Westminster.

With a population of 8,000 people, Frederick has seen an annual 12-percent growth rate during the past decade. It is also projected to have 60,000 residents by 2030, according to a news release.

Talks between the hospitals about building a campus in southwest Weld started last year, Logan said.

Rulon Stacey, Poudre Valley Health System president and CEO, said the joint venture is a “distinctively bold approach” in an industry where health-care organizations in the same region of a state typically expand on their own rather than partner with competing organizations to build a project.

Poudre Valley Health System entered into a joint venture with Regional West Medical Center in Scottsbluff, Neb., to build and, in 2007, open the Medical Center of the Rockies in Loveland. Officials said that was the first time in the U.S. that two nonprofit hospitals — each in a different state — partnered to build a hospital.

A dozen physician clinics in Fort Collins, Greeley and Loveland have become part of Poudre Valley Health, including Greeley Medical Clinic, the region’s largest physician clinic.

Longmont United, meanwhile, has been steadily expanding. Its projects include a new 28,927-square-foot emergency department, which opened in March 2008, and the installation of a state-of-the-art MRI machine.

To develop the campus, the hospitals created a nonprofit company, Carbon Valley Healthcare Holdings Corp. Each hospital has a 50 percent ownership in the facility.

The nonprofit owns the land and will own the facilities. Carson will be board president, and Longmont United will manage the campus.

[denverpost.com]

The only difference between medical office values from sales closed in 2008 versus sales closed in 2009 through 2010 year to date is that the high end has almost disappeared since the start of 2009 because owner/occupants had mostly sat on the sidelines waiting for the health care reform debate to finish.

During this time we saw increased sales of low and medium value medical buildings sold mostly by investors, where the buildings sold either vacant or with various degrees of vacancy/deferred maintenance coupled with leases on short (less than three years) remaining terms.

- 2008 medical office sales: There were 16 medical office sales closed in 2008 in Lee County of which nine sold above $200 per square foot (high value), five sold between $100 and $200 per square foot (medium value) and two sold below $100 per square foot (low value).

These 16 medical office sales in 2008 gave us an average sale price of $203 per square foot because the high and medium value medical sales dominated the year with 14 out of the 16 total medical sales made that year.

- 2009-10 year-to-date medical office sales: There were 18 recorded medical office sales over the past 18 months in Lee County. Only two of these sales were above $200 per square foot (high value) but eight of these sales were between $100 and $200 per square foot (medium value) and eight closed below $100 per square foot (low value).

Since the low and medium value medical office sales dominated the field with 16 out of the 18 total sales closed during the past year and a half, the average price of these 18 closings came down from $203 per square foot in 2008 to $121 per square foot at present.

The high value owner/occupied medical sale/leasebacks were absent during the last 18 months, causing a skewed lower average price for sales over this period. But that is due to change.

- High end due back: Now that health care reform legislation has been enacted, the level of insured medical patients is predicted to rise measurably over the next few years. This is naturally expected to increase patient volume, which is one of the reasons the high growth medical field is so highly sought after by investors looking to purchase long-term net leased medical buildings.

As owner/occupants of medical buildings start bringing their properties back to the market via sale/leaseback transactions, the high value segment (i.e. over $200 per square foot) of medical office sales will once again play a significant part in our commercial real estate landscape.

[news-press.com]

Irvine-based Accretive Realty Advisors has purchased a 27,000-square-foot medical office building in Aliso Viejo for $7 million, according to Colliers International’s Irvine office, which directed the deal.

The three-story property’s primary lease is held by Kaiser Permanente, which occupies two of the floors. Another is mainly occupied by a number of local physician groups.

Investment firms that focus on medical properties have been more diligent in expanding their portfolios over the last 12 months, said John Wadsworth, vice president and director of health care services in Colliers’ local office.

“Despite the tough market for investment sales in general office product, there is still strong demand for medical office buildings from the investment community,” he said. “We have found that investment groups with an extensive medical background have been successful in identifying and structuring value-added medical plays, despite the difficult economic backdrop.”

The building, which is located at 24502 Pacific Park, was previously owned by Newport Beach-based real estate investment firm Saunders Property Co. It will be added to Accretive’s specialized portfolio of medical office properties.

[ocmetro.com]

Construction has begun on a $10 million medical office building in Poulsbo expected to draw patients from the north end of Kitsap County and as far away as Jefferson and Clallam counties.

Cascade View Medical Center, close to the Poulsbo branch campus of Olympic College, will house a full range of cancer-diagnostic services, numerous physicians’ offices and some Harrison Medical Center operations.

It will cover 38,000 square feet of space over two stories.

“We’re really excited to be part of the growth that’s occurring up there,” said Gary Durday, managing member of Olympic Radiology LLC, one of the owners of the building. A number of individual physicians also are owners of Cascade View Medical Center.

Harrison Medical Center will be the center’s biggest tenant, and it will relocate all of its operations now at 19365 Seventh Ave. in Poulsbo to the new facility. Most of those operations are in internal medicine and adult primary care, and led by physicians Bruce Carlton, Connie Tomada and Sharman Hurlow.

Harrison, in the end, chose to lease space in Poulsbo after announcing, then canceling, plans to build new space. It will occupy about 10,000 square feet of space at the Cascade View Medical Center.

Women’s Diagnostic Imaging will be the second tenant.

Individual physicians who have invested in the project and who will have their offices there include John Goessman, an endodontist; surgeons Michael Jungkeit and Sheila Lally; radiologists Steven Bell, Michael Cook, Jim Rohlfing and Brad Brown; family practitioners Brad and Teresa Andersen, Mark Hofmann, and Charles Power; and audiologists Diane and Scott Raszler.

Olympic Radiology of Bremerton will open a second site at the center. It has plans for a stationary scanner that produces detailed 3-D images called a PET/CT scanner, or positron emission tomography/computed tomography. It will be the only PET/CT scanner that is not trucked around both the Kitsap and Olympic peninsulas, Durday said.

The building sits on 2.5 acres near the junction of highways 3 and 305. That location, Durday said, attracted investors, who knew many of their patients would be traveling from a long distance.

The building was designed by Rice Fergus Miller of Bremerton, and the contractor is Anderson Construction, a Northwest company.

[m.kitsapsun.com]