City of Hope once again is showing itโs investing in the future of Orange Countyโs cancer care.
The cancer treatment and research center paid $88.5 million to buy 52 acres of undeveloped land at the FivePoint Gateway office complex in Irvine from Five Point Holdings LLC (NYSE: FPH), a longtime development partner of City of Hope.
City of Hope has no immediate plans yet for the land, but now has โroom to imagineโ ways to meet the needs of current and future patients when the time comes, according to OC President Annette Walker.
โIt was clear to me and clear to the leadership of City of Hope that if there was a way to secure this campus, even though we didnโt have specific plans, it would go a long way in securing City of Hopeโs future in Orange County,โ Walker told the Business Journal.
City of Hope also bought the 2000 FivePoint building, where it previously was leasing space for its administrative offices with more than 100 employees.
FivePoint and homebuilder Lennar Corp., the other current tenants in the building, will continue their leases through 2028, according to Walker.
FivePoint said it will continue to maintain its corporate headquarters at the FivePoint Gateway campus. The developer has a $533 million market cap.
The deal is a bargain for City of Hope.
A year ago, Five Point sold two land parcels totaling nearly 38 acres to industrial developers for a combined $174.2 million, or about $4.6 million per acre.
In May, FivePoint sold 11.6 acres of its Great Park Neighborhoods development for $74.6 million, or about $6.4 million per acre.
Last month, a mixed-use property in The Marketplace sold last month for $19.6 million per acre, per CoStar data.
With this purchase, City of Hope now owns 63.5 total acres at the Great Park. Itโs spending an estimated $1.5 billion to expand its cancer service in Orange County.
Construction is well underway on City of Hopeโs 164,000-square-foot specialty cancer hospital, which is scheduled to open in late 2025.
Unique Developer Partnership
Itโs unusual to see a healthcare provider working with a developer as closely as City of Hope has with FivePoint, Walker said.
โCity of Hope has a long history of addressing the pressing needs of the communities it serves, and this latest milestone in our partnership will prepare them to further accelerate access to nationally recognized cancer care and breakthrough research,โ Dan Hedigan, CEO at FivePoint, said in a statement.
โWeโre honored to support City of Hope in our shared mission to create healthier communities and enhance the quality of life of people in Orange County.โ
Walker said that FivePoint has greatly supported City of Hopeโs mission from the beginning of their partnership.
FivePoint, master developer of Great Park Neighborhoods, first invited City of Hope to come to Orange County in 2018.
โThey saw that this area of Irvine would be an amazing place to lead the development of some of the tech and health innovation in Orange County, so they were specifically looking for a healthcare provider to be the flagship of all that work,โ Walker said.
Walker, a longtime resident of Orange County, was recruited from Providence St. Joseph Health to lead the new location.
โThat was part of the attraction for me,โ Walker said. โI would be bringing healthcare capabilities that Orange County didnโt have to a place where I had lived for over 40 years.โ
City of Hope had originally planned to build a $200 million, 40,000-square-foot clinic, but realized it would need more space after evaluating the health gaps in Orange County.
City of Hope found that 20% of residents were traveling outside of Orange County for proper cancer care, with many going to City of Hopeโs main campus in Duarteโan up to two-hour commute.
Walker said that two things were clear: people wanted highly specialized cancer experts and more clinical trials.
Their vision for a clinic expanded to building a larger comprehensive cancer campus with an outpatient facility and inpatient hospital.
City of Hope in 2019 announced it was buying 11 acres of land at FivePoint Gateway, which includes the 190,000-square-foot 1000 FivePoint building that is now the Lennar Foundation Cancer Center.
The center, which received a $50 million donation from Lennar, was the first building to be completed within the campus.
City of Hope so far has treated 32,000 patients since coming to Orange County.
โI just want people to know how grateful we are that we have been so well received by Orange County, and that weโre proud to be part of this community,โ Walker said.
The next phase is completing the hospital, which will have 73 beds and be connected to the Lennar outpatient cancer center.
Officials say it will be the regionโs only hospital exclusively dedicated to treating and curing cancer.
Most of the construction left to do is on the interior of the hospital, according to Walker.
She said theyโre on track and on budget to finish the hospital in late 2025 and expect to hire 500 additional employees once it opens.
โPeople are going to have a full suite of City of Hopeโs capabilities because thereโs some things that we just canโt do without an inpatient bed,โ Walker said.
โNearly every clinical kind of care that City of Hope provides will be available on this campus and to the people of this community.โ
Original Broadcom Campus
The 73-acre, four-building FivePoint Gateway office campus at the Great Park Neighborhoods was originally built for Broadcom Inc. under the expectation that it would own and occupy the entire site.
Plans changed when Avago Technologies Ltd. acquired the chipmaker in 2016 for $37 billion, decreasing the size of Broadcomโs local base operations.
Broadcom opted to sell the under-construction campus to a venture backed by FivePoint and lease back the two largest buildings.
The deal, struck in 2017, valued the entire campus at $443 million.
The two remaining buildings in the complex were sold to another institution that leases them out to Broadcom. The surrounding property will โnow be under the purview of City of Hope,โ Walker said.