A four-story medical office development is being planned for a spot across the street from Mission Hospital in Mission Viejo in the latest big real estate deal involving property next to the St. Joseph Health-run facility.
Newport Beach-based real estate developer NCA Real Estate recently took the wraps off its plans for Mission Viejo Medical Center, a 110,000-square-foot office building it plans to construct between the hospital and the Shops at Mission Viejo.
NCA will build the office and an accompanying five-story parking structure on about 3.7 acres of excess land at the 1.2-million-square-foot shopping center just off the San Diego (I-5) Freeway and Crown Valley Road.
The medical center will be across the street from the entrance of St. Joseph’s 552-bed hospital on Medical Center Road.
The developer plans to build the center over the next two years at a cost of more than $35 million and offer it for lease. Construction is expected to begin once preleasing nears the 50% mark, according to David Zak, NCA principal.
“We think it’s a really important project in a great location,” he said.
The developer has enlisted the global healthcare services team of Newmark Grubb Knight Frank as the exclusive leasing agent for the offices, which it said will include a mix of full-floor tenants and smaller users in the 3,000-square-foot to 4,000-square-foot range.
“We’re targeting large physician practices, outpatient surgery, imaging, and hospitals for this space,” said Garth Hogan, executive managing director for Newmark Grubb’s healthcare team, which is based in the brokerage’s Newport Beach office.
Potential professional services to be provided there include imaging, outpatient surgery, gastrointestinal laboratory, and oncology, among other things, according to city filings.
The project will generate 75 full-time physician positions and 200 full-time positions for nurses and other support staff, according to Newmark Grubb estimates.
The center is one of the largest healthcare-related developments planned for South Orange County, along with Shady Creek Medical Center, a 157,200-square-foot project to be built at Alton Parkway and Sand Canyon Avenue in Irvine, a few miles from the Irvine Spectrum shopping center.
Construction of the Irvine project, across the street from Hoag Hospital Irvine and Kaiser Permanente Irvine Medical Center, will begin in earnest early next year, according to Hogan, whose team preleased the bulk of that development to Hoag Memorial Hospital Presbyterian.
San Diego-based Pacific Medical Buildings LLC is heading up the Irvine development.
Newmark Grubb’s Hogan, John Scruggs, and Ryan Clark are handling preleasing on behalf of NCA for the Mission Viejo building.
More in Works?
It remains to be seen if any medical-related construction around Mission Hospital will be added to the NCA project over the next few years.
NCA’s new office plans come about two months after one of OC’s largest office deals of the year. The Innovation Institute LLC, a La Palma-based for-profit healthcare company formed by St. Joseph Health in Irvine last year, bought four offices surrounding the hospital that total about 263,000 square feet.
Terms of the sales haven’t been disclosed, but St. Joseph Health, the nonprofit owner and operator of Mission Hospital, is lending the Innovation Institute $130 million to fund the purchase, according to loan documents.
The largest of the four buildings is the Mission Medical Tower, a five-story, 120,000-square-foot medical office on Crown Valley Parkway.
A trio of multitenant offices at 27800 Medical Center Road also traded hands in the deal and is located less than a block from NCA’s proposed office. They total about 143,000 square feet.
Real estate watchers said they believe the three offices, which were built in the 1970s, could be in line for a major redevelopment in a few years.
The Innovation Institute hasn’t disclosed plans for the buildings.
Simon Land
NCA entered into a long-term ground lease with Simon Property Group Inc. to build its office project, according to Zak.
Indianapolis-based Simon, the majority owner of the Shops at Mission Viejo and the largest owner of shopping malls in the U.S., sold a 49% stake in the Mission Viejo shopping center to Skokie, Ill.-based Institutional Mall Investors LLC in late 2012 but retained a majority interest in the property, which has an appraised value of nearly $540 million.
NCA was previously in discussions with Simon to build a similar project on excess land at Laguna Hills Mall next to Saddleback Memorial Medical Center. That project was scrapped last year after Simon sold the struggling retail center, which is now slated for a major renovation, to Merlone Geier Partners for $110 million.
The Mission Viejo project is NCA’s first Orange County development in several
years. The company, formed in 2002, has a pair of apartment projects under way in San Diego.
