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Kim_Gatley
Kim Gatley
S
enior Vice President & Director of Research at REOC San Antonio

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Demand driving investments in health care sector

medical_StethIt’s all about convenience.

That is the goal driving many health care businesses to the city’s office buildings and retail centers — often at the expense of the medical-only properties.

A new development on the city’s Northwest Side, however, is proving that there is still demand for medical space.

Earlier this month, Tresha MOB LLC announced plans to development a new medical campus, at 9618 Huebner Road, near the South Texas Medical Center. Known as the Christopher Medical Office Building at Grace Point, the campus will feature a two-story, 36,000-square-foot medical office building. Tenants already signed on to the project include the Texas Center for Medical & Surgical Weight Loss, which will occupy 13,000 square feet. An ambulatory surgical center will occupy another 9,000 square feet.

Tresha MOB officials put development costs for the project at $11 million.

The Christopher Medical project also speaks to the growth of a particular thoroughfare, Huebner Road, and its rise as a leading medical corridor.

Investors looking to stake their claim with new projects are not the only ones scouting Huebner Road. This past December, Columbus, Ohio-based Equity Inc. purchased Huebner Medical I & II located at 9150 Huebner — a complex spanning more than 166,000 square feet.

Where there’s one …

The vital signs for the local health care industry remain strong, according to the year-end 2014 medical office market report by REOC San Antonio. Quoting figures from the 2014 Healthcare & Bioscience Economic Impact Study, REOC points out that this industry generates an annual economic impact of $23.98 billion for San Antonio. Over the past decade, the health care and bioscience sector has added more than 41,500 net new jobs to the city — which translates to a 40 percent growth rate.

“Job growth typically translates into increased demand for commercial real estate,” noted Kim Gatley, senior vice president and director of research for REOC.

That’s true. But the demand is not always for medical space.

“Even as legislation continues to impact the industry, health care providers are working to offer their patients more convenience,” noted Carl Bohn, a REOC Vice President and a veteran of the medical real estate industry. “This often translates into multiple locations throughout the area and is not limited to medical-only office buildings.”

Retail space, for example, continues to see a lot of activity from physician practices. These groups are out to get more patients, which means having the most convenient locations possible — like the shopping centers that patients already frequent for their daily essentials.

More to come

Looking ahead, while shopping centers and general-office properties will continue to be viable options for some practices, others will seek out the more traditional medical set up.

Demand for smaller spaces is also driving the growth of what Bohn called niche projects — developments like the Inwood Medical Office building, which will span 22,600 square feet along Loop 1604 near Bitters Road in North Central San Antonio. Meanwhile, on the far West Side, construction is wrapping up on the Westover Medical Park, a 15,000-square-foot building located along the State Highway 151 corridor. This project is 100 percent preleased — “which is indicative of the demand for medical space in the area,” concluded Bohn.

Click to read entire article: Demand driving investments in health care sector (San Antonio Business Journal, 03-27-15)

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