Healthcare Trust of America (HTA), Inc. announced investment activity of more than $200 million in new development projects and acquisitions since June 30, 2019. Investments include two on-campus medical office building developments with total costs between $85 to 90 million, and approximately $115 million of acquisitions closed in the third quarter of 2019.
HTA has reached agreements to develop two new on-campus MOBs with health systems in HTA’s existing markets. These developments will total approximately 190,000 square feet of gross leasable area (GLA). Developments are expected to have commitments to lease more than 73% of the space prior to the start of construction, and are being developed to anticipated stabilized yields of over 6.5%.
Pavilion III MOB, Dallas: HTA will develop a Class A MOB with 107,000 square feet of GLA on the new Medical City Heart Hospital and Spine Hospital campus (formerly Forest Park). Construction is expected to begin in the fourth quarter of 2019 and be completed by the first quarter of 2021 at an expected cost of approximately $55– $60 million, including structured parking. HTA currently owns two existing MOBs on this campus that are over 90% leased as of June 30, 2019. With this development, HTA’s investment on this campus will increase to over 300,000 square feet of GLA of fee-simple, on-campus MOBs. The Company has also entered into a contract to purchase a 6-acre parcel of land located immediately adjacent to the campus which it intends to hold for future expansion.
Memorial Hospital MOB (Bakersfield, Calif): HTA will develop a Class A MOB with 84,000 square feet of GLA located on CommonSpirit’s (formerly Dignity) Memorial Hospital in Bakersfield, Calif. This MOB is expected to cost approximately $30 million to develop, with construction expected to begin in the fourth quarter of 2019 and be completed by the first quarter of 2021. This development will expand HTA’s relationship with CommonSpirit to a 10th hospital campus and will bring occupancy with HTA to over 470,000 square feet with this key health system.