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2015 MARKET REVIEW: Health Care and Medical Office End Year on High Note

The vacancy rate for medical office space across San Antonio remained under 20 percent during the third quarter of 2015, according to REOC’s newest medical office market report.  The report states that there was a 1.1 percent rise from the same quarter in 2014, but that slight increase in rent of less than $1 shows the medical office market is stable.

WellMed Office
WellMed Office

The latest big move here is WellMed Medical Management, which recently signed an extra 40,000 square feet to its lease in The Oaks at University Business Park.  The health care provider is the sole occupant of the 80,000-square-foot facility at the business park, which covers 298,000 square feet over three buildings. WellMed is expected to expand into its new space in the second quarter of 2016, with a $1.15 million finish-out. WellMed leased a little less than 25,000 square feet in the park’s second building, but has shown industry growth. The Oaks at University Business Park has about 10 percent space left for additional occupancy from any other tenants.

According to REOC report, the average rent for medical space went up to $24.49 per square foot locally, with far North Central and far West San Antonio seeing interest in such space rise due to the development of more structures and availability of land.

It has been an active year for other health care-related providers in San Antonio – most news was good while, for others, it was a mixed bag.  Victory Hospital declared bankruptcy, prompting concerns the fate of its Northwest San Antonio property. Then Post Acute Medical affiliate Cumberland Surgical Hospitals entered the market, filling the 82,316-square-foot space.  Meanwhile, CBRE Capital Markets is aiming to close a deal in early 2016, a deal that could have another health care provider fill the $90 million Forest Park Medical Center, which went bankrupt this year. FastMed Urgent Care, which has leading operations in Arizona and North Carolina, acquired Texan Urgent Care and its 14 clinics, including five in the San Antonio area.

Newly Constructed Forrest Park Medical Center
Newly Constructed Forrest Park Medical Center

Thanks to this move, FastMed’s footprint will be growing to 104 locations across Texas, Arizona and North Carolina.  There are big things in the local health care industry over the next two years. The University Health System has approved $50 million in capital projects, including a planned consolidation of its pediatric inpatient services in the Horizon Tower at University Hospital. Methodist Stone Oak Hospital announced plans for a $60 million expansion. The Institute of Women’s Health is under construction at the South Texas Medical Center Methodist campus. Fulcrum development announced plans for a 116,000-square-foot medical office facility in the South Texas Medical Center area.  Other notable planned projects locally include the 20,887-square-foot Inwood Medical Office, the 60,000-square-foot Victory Medical office building; and the 32,390-square-foot Rogers Road Medical Plaza.

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