The Reform Stalemate is Over
Hospital systems have figured out how to work with healthcare reform, and the years-long pause is over. (You can't play the game until you know the rules. Unless you're an NBA ref.) That’s leading to a big push in development across Houston, making it an exciting time to host our annual healthcare real estate summit (register now!). In advance of the event, we rounded up some new projects underway.
With Phase 1 of Katy Medical Plaza completed, Transwestern manager Tim Gregory has begun pre-leasing Phase 2. Phase 1 was a 50k SF LEED Gold MOB, which Tim says will likely hit high 90s or even 100% occupancy by late summer. Another 50k SF building will break ground in a few months, leaving a third 50k SF building for a final phase. The three facilities will be identical, and will create a one-stop-shop campus. (Right now Tim's heavily targeting large primary care groups.)
Tim says the property benefits from its location in Katy, one of the hottest healthcare markets in Houston. It consists of 17 MOBs totaling over 810k SF. Overall occupancy is 92%, with only 67k SF available for lease. All seven Class-B properties are 100% full. (Don't get hurt or sick. But if you must, do it in Katy.) Perhaps the coolest thing about Katy Medical Plaza is its sustainability, which has driven opex way down. The average Houston MOB has $10/SF in opex, but this property is at $5 right now, and will likely stabilize around $7/SF.