Healthpeak Properties Inc. last week announced plans to move its executive team and corporate headquarters from Irvine to Denver, but the $15.3 billion-valued real estate investment trust is leaving behind land that could hold one of the largest new healthcare projects the area’s seen in years.
Hoag Memorial Hospital Presbyterian recently filed early stage plans with the city for a major expansion of its 154-bed Hoag Hospital Irvine campus, which it opened in 2010.
The Newport Beach-based hospital operator currently leases the site from Healthpeak (NYSE: PEAK), but next year plans to buy the property for $226 million, regulatory filings indicate.
The price includes both the existing facilities at the campus as well as excess land.
City filings indicate that land has the potential to hold more than a dozen new facilities on the campus, located at the intersection of Sand Canyon Ave. and Alton Parkway, just off the San Diego (405) Freeway.
Additions under consideration include a Women’s Hospital as well as a Digestive Health Hospital, among other medical buildings, support facilities and parking structures, city filings show.
The filings indicate the two-phased expansion could add approximately 432,000 square feet to the Hoag campus, and increase the number of hospital beds there to 391.
A timeframe for the project moving ahead hasn’t been disclosed.
“We look forward to continuing to provide the best comprehensive care in the region and further our relationship with Irvine,” said Marcy Brown, senior vice president and chief operations officer for Hoag, in a statement provided to the Business Journal last week.
“Soon we will be discussing in detail the expansion plans for Hoag Hospital Irvine, as we strive to meet the needs of the growing community,” Brown said.
2010 Opening
When Hoag opened the Irvine outpost in 2010, the campus totaled 244,000 square feet. It has since spent tens of millions of dollars upgrading and expanding the campus, which was previously known as Irvine Regional Hospital and run by Dallas-based medical property operator Tenet Healthcare Corp.
Tenet closed the facility in 2009 after its lease at the site ended, and arrived at a legal settlement with its landlord at the time, Healthpeak, which then was based in Long Beach and called HCP Inc.
Hoag soon stepped up and announced plans to take over the Irvine hospital, at the time putting on hold plans to expand its much larger Newport Beach hospital, which currently counts nearly 450 beds.
Hoag owns its expansive Newport Beach hospital campus, which CoStar Group Inc. records indicate runs some 2.1 million square feet.
Hoag reportedly invested $84 million to upgrade the Irvine facility prior to the 2010 opening of the acute care and orthopedic specialty hospital, which includes a five-story patient bed tower that adjoins a three-level central atrium.
Funds went to building new operating rooms, nursing floors and imaging equipment, as well as rebuilt patient rooms, pre- and post-surgery recovery areas and space for advanced medical technologies, according to news reports at the time.
Recent additions include the Benjamin & Carmela Du Emergency Pavilion, which opened in 2018. At 13,500 square feet, the facility is five times the size of the original emergency room space.
“Since opening Hoag Hospital Irvine 10 years ago, Hoag has elevated care in service of the community,” Brown told the Business Journal.
“We have steadily expanded the facilities, scope of services, programs and professionals dedicated to the community’s health care. From the expansion of the Benjamin & Carmela Du Emergency Pavilion, to the opening of five urgent care centers and three major health centers, to a second diabetes center and cancer infusion center, Hoag has demonstrated an enduring commitment to our patients in Irvine and the surrounding area.”
“In just a few weeks Hoag will open the long-anticipated Fudge Family Birthing Suites, enhancing health care choices right where they make the most sense—in the heart of this growing community,” Brown said.
Healthpeak Moves HQ to Denver
Irvine-based healthcare property investor Healthpeak Properties Inc. (NYSE: PEAK), one of Orange County’s ten most valuable publicly traded companies with a market capitalization in excess of $15 billion, moved its headquarters to Denver last week.
The city’s more centralized geographic location relative to Healthpeak’s portfolio locations and existing offices in Irvine and Nashville, which will remain in operation, were main drivers of the move, the company said.
Healthpeak leases close to 49,000 square feet of office space near John Wayne Airport, brokerage data indicates.
The size of its new Denver headquarters wasn’t immediately disclosed.
“We believe this will be much more efficient for senior executives,” Chief Executive Thomas Herzog, told analysts on the company’s third-quarter earnings call last Tuesday. “We’re always had difficulty with travel between Nashville and Irvine.”
About 20 to 25 local employees, including much of the executive management team, will relocate to Denver next year, Herzog said.
That figure is a significantly smaller number compared to previous reports that anticipated the move would affect up to 160 Irvine employees.
Talent Incentive
Healthpeak, known for developing and owning real estate in the life science, senior housing and medical offices sectors, was founded in 1985 as Health Care Property Investors.
It moved from OC to Long Beach in 2004 and returned to Irvine in 2014. Its largest and most valuable local asset is the Hoag Hospital Irvine campus, which it intends to sell next year to the hospital.
Elsewhere in the state, it has significant holdings in San Diego and the Bay Area.
It changed its name to Healthpeak last year and today employs 233 workers, according to Business Journal records.
The company believes the Denver site “provided a favorable location to attract and retain talent,” Herzog told analysts.
Colorado’s economic development group offered more than $5 million in performance-based incentives for Healthpeak to relocate, as first reported by the Denver Business Journal.
The company was also eyeing the Dallas area, as well as Nashville, for a new HQ, according to national reports in October.
Healthpeak would reportedly pay average wages above $425,000 for those that make the move to Colorado; the average annual wage is reported to be the highest ever by a company that’s received state-job growth incentive tax credits in Colorado.
Healthpeak joins a number of notable companies that have left town in recent years, for a variety of tax, talent, and operational reasons.
Recent departures include Mitsubishi Motors, whose domestic operations were formerly run out of Cypress, and Irvine’s Cryoport Inc. (Nasdaq: CYRX), a provider of cold-chain logistics services for the biopharmaceutical industry. Both relocated to the Nashville area earlier this year.
Cryoport, valued at about $2 billion, still has a large operational presence in Irvine.
