MOB market healthy

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MOB
Show in the 5-story, 89,000-sf, UC Health Center MOB to be developed by Brookhaven Capital Partners at 100 Cook St. in Cherry Creek North. It is being designed by Davis Partnership Architects.

The Denver area medical office building market, by almost every metric, is not only healthy, but also in tip-top shape.

Last year, $105.2 million in medical office buildings, or MOBs, traded hands, a 20.9 percent jump from 2015, according to a CBRE analysis of the MOB market. Catholic Health Initiatives sold the Lansing Point building in the Meridian International Business Center for $17.5 million, accounting for 16.6 percent of the total sales volume.

In addition, 162,626 square feet of MOB space was absorbed last year, which is close to the 167,351 sf under construction, the CBRE report shows.

And that does not even include the five-story, 89,000-sf, UC Health Center MOB to be developed by Brookhaven Capital Partners at 100 Cook St. in Cherry Creek North. It is being designed by Davis Partnership Architects and will be built by Swinerton Builders. It will be completed in 2018.

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A view of the UC Health Center MOB planned by Brookhaven Capital in Cherry Creek North

Cherry Creek has only a 2.9 percent availability rate, according to CBRE, making it the tightest submarket in the Denver area.

Health care employment last year grew even faster than the brisk overall economy, which saw a 3.2 percent increase in jobs.

Health care employment grew by 3.6 percent, adding 6,200 jobs, according to CBRE. That accounted for 12.4 percent of the 50,000 jobs added to the Denver area economy last year.

CBRE Executive Vice President Christopher R. Bodnar, who a little more than a decade ago formed CBRE’s Healthcare Capital Markets Group, will provide a state of the industry and 2017 Health Care Property Outlook at a half-day conference April 20.

The 2017 Health Care and Medical Office Buildings Conference and Expo, sponsored by the Colorado Real Estate Journal, will be held from 7 until 11:45 a.m. at the Hyatt Regency Aurora-Denver Conference Center.

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CHI sold this MOB building in the Meridian International Business Park last year for $17.5 million.

Topics explored at the conference will include:

  • What Colorado’s health care systems are planning for the future,
  • Design and construction,
  • Brokerage and
  • Development and investing.
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A snapshot of lease rates and vacancies in Denver’s MOB market. Source: CBRE

In addition to Bodnar, other speakers at the CREJ conference include:

  • F. Chase Simons, a shareholder and the Real Estate Practice chairman at Polsinelli law firm;
  • Bobby Guy, shareholder, Polsinelli;
  • Kevin Kucera, director of Real Estate, HealthOne;
  • Jeffrey A. Crawford, principal, RMI Capital Management LLC;
  • Scot Brooks, director of real estate and construction, Centura Health Services Center;
  • Courtney Hanfland, system director – real estate transactions, Catholic Health Initiatives;
  • Clayton Mithcell, executive director, National Facilities Services Colorado, Kaiser Permanente;
  • Ann McCullugh, shareholder, Polsinelli;
  • Jerry Heberlein, director of preconstruction, Hensel Phelps;
  • Brandon Bergholz, healthcare market leader and construction executive, Mortenson;
  • Mark Arnold, director of healthcare, GH Phipps Construction Cos.;
  • Margie Snow, principal, Gallun Snow Associates;
  • Mary Morissette, principal, Page/;
  • Paul V. Fanke, shareholder, Polsinelli;
  • Cheryle Powell, director, Global Healthcare Services, Colliers International;
  • Terrence Pace, broker, Healthcare Solutions Specialists, JLL;
  • Stuart Thomas, senior associates, Healthcare Practices Group, Cushman & Wakefield;
  • Perry Bacalis, broker, Carr Healthcare Realty;
  • Naum Nasif, senior associate, brokerage services – Healthcare Real Estate, CBRE;
  • Dann Burke, vice president, Healthcare Services, CBRE;
  • Joseph Fogarty, vice president, investments, Healthcare Realty;
  • John Marshall, vice president, national healthcare strategy and development, Duke Realty;
  • Andrew Shearer, managing director of real estate development  –  COO, Development Solutions Group LLC;
  • Tom Hulme, vice president of development & leasing, HCP;
  • Michael Thomas, vice president, Gershman Mortgage; and
  • Shane Seitz, senior investment officer, Ventas Inc.

With all of the political rancor, it can seem like the U.S. health care system is on life support.

But that is not the case for the MOB market in the Denver area. As the CBRE MOB report says: “2017 is poised for continued healthy market trends.”

 

If you scratch the surface of just about any deal, there is a story behind it. The Rebchook Real Estate Corner looks at the what and who that make the Colorado commercial real estate industry spin every Tuesday and Thursday online at CREJ.com. The people behind the deals are passionate about what they do, whether they focus on offices, apartments, industrial, retail, land or lending. They also are passionate about their clients. Given the cyclical nature of commercial real estate, those who prosper in it have plenty of stories to tell. I hope to share them with you. 

This column includes news stories, in-depth looks at deals, profiles, Q&As and pieces on the latest trends. Contact John with story tips at JRCHOOK@gmail.com or 303-945-6865.

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