Quick Glance
- 27,113 SF off-campus medical office building
- Occupancy March 2014
- $1.8 million raised in capital investment
- Anchored by Centura Health
- Sold April 2018
The Challenge
Construct a Class A medical office building while keeping costs low to provide high returns for a physician-tenant equity structure.
HCP’s Solution
Select a prime site to attract physicians willing to invest in the building and get a return on their investment they otherwise wouldn’t have in exchange for long-term, NNN leases to optimize property value. Property disposition 4 years after opening for above-market returns.
Summary
Health Connect Properties (HCP) served as the developer for Cornerstar Healthcare Plaza and the advisor to the ownership, a private equity group. In this capacity, we offered physicians the opportunity to invest up to their proportionate share of occupancy. With physicians investing in their practice’s leased space, they became motivated to commit to a long-term tenancy; thus, drastically increasing the value of the property. In return, the physicians see a much lower overall occupancy cost over the course of their term.
We raised the remaining equity capital necessary for the building through outside investors – in total, $1.8 million was raised in capital investment.
Patricia Wassik, HCP’s president, partnered with the founder of Waner Construction, Tim Waner, to spearhead the project. The duo’s experience allowed them to conceptualize and create a premiere medical office building backed by the physician-tenant equity structure. They were initially tasked with selecting a pad site in a desirable location to entice the owner-users.
The pad site was thus selected on Parker Road due to its elevated location on Parker Road and Arapahoe Road – one of Colorado’s busiest intersections. The site provided visibility to 65,000 daily passing cars but also included panoramic views of the Rocky Mountains. It’s proximity to nearby hospitals yet low density in medical clinics made it highly attractive for prospective owner-users.
Health Connect Properties leasing team had the building 50% pre-leased before construction; and within six months of opening, the building was 86% occupied. Centura Health, Colorado’s largest healthcare system, agreed to lease the entire second floor for primary care use.
HCP closed on the sale of Cornerstar Healthcare Plaza on Monday, April 16th. The buyer was an entity advised by Anchor Health Properties and Chestnut Real Estate.
Our project management team coordinated all tenant finish buildouts from space planning, construction, final punch list, and occupancy. The property management team developed a plan prior to opening and continued all management services until close. The asset management branch managed the building’s financial performance and provided quarterly investment reports and distribution reports. And finally, our sales team oversaw everything from determining the timing of a disposition to guiding the Due Diligence process through to closing.
About Cornerstar Healthcare Plaza
Built in 2014, Cornerstar Healthcare Plaza is 100% leased with long-term medical tenants. The property is anchored by the largest healthcare system in Colorado, Centura Health. The unique and contemporary architecture is paired with a very efficient floor plan creating a highly desirable property in a low-risk industry.
Cornerstar Healthcare Plaza is located in the densely populated city of Aurora – Colorado’s third largest city. Situated at the intersection of Arapahoe Road and Parker Road, the property has premiere visibility with 64,000 daily passing cars at one of the busiest intersections in metro Denver. Signalized access at both thoroughfares provides for easy access into the property. The medical office building is within 4 miles of both Parker Adventist Hospital and Centennial Medical Plaza offering a centralized location for patients and tenants alike.
“I have never experienced a more highly responsive group as a building owner. From paying the bills to leasing to property management, the communication & performance of Health Connect Properties is without exception. It doesn’t matter if a meeting is at 7 AM or 7 PM, they are in attendance, overly prepared, and coming to the table with solutions.
Pat’s greatest asset is her ability to make contact with the doctors. When leasing our new medical office building, she had an ability to call every health system and get directly to the decision makers. The name and reputation of Health Connect Properties is the reason we had an immediately stabilized asset.
Developing a property takes patience, passion, attention to detail, and construction knowledge. Health Connect’s extensive portfolio of developing, constructing, leasing, and managing Class A medical properties gives them a way to benchmark costs that other developers may not have. They provided us with information regarding costs and development fees that allowed us to create a manageable budget from the concept stage.”
Tim Waner
Managing Member
Cornerstar Healthcare Plaza, LLC