More than 100,000 square feet of space is coming to the airtight Orange County medical office market next year.
Early work on Providence Center in Fullerton, which calls for medical space mixed with restaurants, is under way. The cost of the project is expected to come in at more than $50 million, said Thomas LeBeau, chief executive of developer Accretive Realty Advisors Inc. of Newport Beach.
Providence Center is set for about 6.7 acres of land west of St. Jude Medical Center on Harbor Boulevard. The center is about 175 yards from the hospital “as the golf ball flies,” LeBeau previously has said.
Plans call for a 90,000-square-foot main medical building, a 23,000-square-foot “boutique” medical office building and 8,000 square feet of space for a coffee shop, restaurant and dessert parlor.
A four-level, 565-space parking structure also is planned.
The steel structure of the first building is set to go up in September. The building is slated to be done and occupied in July.
Work on the other two buildings should start in 2007 and finish up by the end of the year.
Providence Center is about 60% leased. Accretive hired Medical Realty Advisors, a Newport Beach-based brokerage, to handle preleasing.
Rents at Providence Center are $3.25 to $3.50 per square foot, said Garth Hogan, Medical Realty’s president.
“That is right at the top of the class A new medical office space in Orange County,that would include Newport Beach and Irvine,” Hogan said.
Most new medical office space is “brand new class B” with rents running less than $3 a square foot, he said.
OC is one of the tightest medical office markets around. Brokers said vacancy rates are hovering around 1%.
Tenants at Providence Center include a urology center, diabetes center, women’s health center,the second floor is dedicated to women,and a medical spa run by dermatologist Renee Cobos.
“We are very particular about where we locate our physicians, who we rent space to,” LeBeau said. “We’re trying to create a situation where they can all grow their businesses.”
Getting to this point wasn’t easy. Providence Center faced opposition from residents who prevailed in getting Accretive Partners to drop plans for condominiums at the project and scale back the size of some buildings.
It’s been some 15 years since medical space has come along near St. Jude, according to LeBeau.
St. Jude itself is in the midst of an expansion that includes a five-story, 108,000-square-foot hospital tower.
The expansion also includes an endoscopy center, a parking garage and medical office building linked to the main hospital via a bridge over Harbor Boulevard.
“St. Jude is in the process of essentially doubling its size, and it’s becoming a premier, if not the premier, regional medical center in North Orange County,” LeBeau said. “With their growth comes the ancillary requirement for new space.”
Several other medical projects are under way in the county.
In Tustin, Newport Avenue Medical Plaza, a 20,935-square-foot building on Newport Avenue, is set to open later this year.
Newport Avenue Medical is a project of Irvine-based ACS Development Group, which is acting as developer and contractor. Newport Avenue was just over 20% preleased as of late July, brokers said.
“Doctors prefer to commit to the leases after a substantial amount of construction is already completed,” said Andrew White, a broker in CB Richard Ellis Group Inc.’s Anaheim office.
White and Rick Warner, another CB Richard Ellis broker, are marketing Newport Avenue Medical.
Enterprise Commercial Development Inc. of Lake Forest just paid $13 million to The Irvine Company for 4.2 acres zoned for medical office space in the Irvine Spectrum.
Enterprise is expected to start work later this year on a three-story, 67,000-square-foot medical condominium complex targeting dentists, psychologists and other doctors.
