A $20 million medical office building is going up in Yorba Linda.
The 88,000-square-foot, one-story project is one of a few to go forward after a cooling this year in the county’s medical office building boom.
Close to half a million square feet of medical office space has been built in the county in the past two years, according to real estate brokerage Colliers International Property Consultants Inc.
Vacancy rates for medical space now are about 12% on average, better than other real estate segments but up a couple percentage points from last year.
Much of the empty space is in recent developments that have yet to be leased up, particularly in Irvine.
The Yorba Linda building, at Rose Drive and Bastanchury Road, won’t have that problem. It is being built for St. Jude Heritage Medical Group, a doctors group affiliated with Orange-based hospital operator St. Joseph Health System.
St. Jude Heritage’s new building is set to replace the group’s current Yorba Linda facility, which was built in 1972. The lease for the old facility expires next fall.
“The current space is outdated and inadequate,” said Michael Sugarman, president of St. Jude Heritage.
The new building is being designed for primary care and specialty doctors and includes a medical imaging center and urgent care.
The group’s current building can’t accommodate new medical technologies and lacks space for support staff to work efficiently, according to Sugarman.
The new building is designed for new medical equipment and electronic medical records systems, said Jake Rohe, director of development at San Diego-based Pacific Medical Buildings LLC, the project’s developer.
St. Jude Heritage also hopes to recruit doctors with the building, he said.
The group has owned the land the building is going up on for some 30 years, Rohe said.
“They’ve always wanted to put a medical office building on it, and it’s just never really come to fruition for a number of different reasons until now.”
St. Jude Heritage is paying for the new building through borrowing, according to Sugarman.
Construction is set to start in December and be finished in early 2011.
The group plans to move 180 people, including 29 doctors, to the new building in early 2011.
Ware Malcomb, an Irvine architecture firm, is designing the building.
St. Jude Heritage has offices in Fullerton, Brea, La Habra and Diamond Bar.
Other Projects
Pacific has done several other projects in Orange County.
Those include the St. Joseph Medical Plaza, a seven-story, 130,000-square-foot medical building on St. Joseph Hospital’s Orange campus.
Pacific also developed Mission Medical Plaza, which has five stories and 140,000 square feet of space. It is on the campus of St. Joseph’s Mission Hospital in Mission Viejo.
Nearly all of Pacific’s work is for nonprofit healthcare providers such as St. Joseph, according to Rohe.
“We find it’s a great experience to work with them,” he said.
Pacific also develops medical office buildings with Newport Beach’s real estate in-vestor Nationwide Healthcare Properties Inc.
In 2008, Nationwide bought 28 medical office buildings from Pacific for $915 million, including Mission Medical Plaza and St. Joseph Medical Plaza.
Nationwide also bought half of PMB Real Estate Services LLC, Pacific’s property management company.
