Nearly one-third of an office tower in Irvine will be converted into space for healthcare providers, as part of a growing demand for medical facilities in central Orange County.
The Kelemen Company, an Irvine-based commercial real estate investment and property management firm, announced last week it completed the entitlement of 115,025 square feet of medical space at the 335,124-square-foot Atrium office tower, located at 19200 Von Karman Ave. in Irvine.
The space is located near a $1.3 billion medical complex being constructed by the University of California, Irvine. The Chao Family Comprehensive Cancer Center and Ambulatory Care building and the Joe C. Wen & Family Center for Advanced Care opened earlier this year; a 144-bed acute care hospital is scheduled to be completed by late next year.
The Atrium plans to provide offices for a variety of medical services.
โThis entitlement not only supports the expanding healthcare sector but also reinforces our dedication to improving our communityโs overall quality of life,โ The Kelemen Company Chief Executive Tibor Kelemen said in a statement.
Barings Real Estate, the real estate investment arm of Charlotte-based Barings LLC, bought The Atrium in 2000 for $60 million; in 2018, it sold the building to The Kelemen Company for $106.8 million, or $352 per square foot. The Kelemen Company immediately announced plans to renovate the office tower.
The Atrium, a 10-floor high-rise near John Wayne Airport, has well known businesses including the headquarters of Index Fund Advisors Inc., which has $5 billion in assets under management, and the Orange County Community Foundation (OCCF), the second largest nonprofit in the county with $213.4 million in revenue for the year ended June 30.
The ground floor features Bistango, a restaurant popular among OC executives.
Kelemen, in 2018, said his company planned to focus on โa hospitality vibeโ and make a series of changes to the buildingโs indoor courtyard, such as adding an upscale coffee shop and providing spaces for employees to meet.
Other proposed building upgrades in 2018 included the installation of solar panels, the planting of palm trees within the interior and a 5,000-square-foot fitness center.
The Kelemen Company will now work to fill the space with healthcare providers
and other medically themed tenants.
Growing Healthcare Real Estate
Central Orange Countyโs market for healthcare services has been growing, per CBRE. The real estate advisory firm found overall vacancy for medical office space in the Greater Airport Area was 5.9%, compared to 5.6% for central Orange County and 6.3% for the county, as a whole.
CBRE said six health-related buildings across Orange County were actively under construction this year, bringing 592,696 square feet online. Nearly 35,000 square feet of that space was allocated for medical office uses. The remaining space was allocated to hospital-based uses, per CBRE.
A Colliers report on the national medical office market added the outlook for healthcare providersโ real estate needs could remain strong as โdemand for healthcare services should continue growing as the population grows and the youngest Baby Boomers turn 60.โ
The Kelemen Company, with more than one million square feet of office space under management, also manages the Atrium while Stream Realty Partners LP handles the buildingโs leasing.
Premier Workspaces sublets coworking spaces at The Atrium.
Representatives at CBRE and The Kelemen Company did not immediately respond to the Business Journalโs requests for comment.
