LOOKING TO LEASE? SEEK EXPERT HELP
South Florida Hospital News
By Lois Thomson
Leasing medical office space requires an expert in the field of
health care real estate, declared Kenneth Weston, whose company,
Kenneth Weston & Associates, Inc., has specialized in medical
office space for more than 25 years. Fortunately, physicians and
health care professionals can find that expertise in South
Florida.
Weston made just a few points about how he and his firm can
assist physicians with their needs: “There are special things
involved when you’re dealing with medical real estate leases
that are not the same as commercial leases with other types of
professionals.”
Weston did a year’s internship at a hospital when he first
became involved in leasing. He said, “I wanted to be familiar
with physicians and their requirements, and I learned that each
specialty has different needs. For example, pediatricians need
much smaller exam rooms than an orthopedic surgeon. Plus, all
physicians need an exit and an entryway because the doctor
doesn’t want to enter the office through the reception room. We
see buildings all the time that aren’t designed properly. So in
leasing space, one’s background is very important. Knowledge is
the most important thing.”
He also mentioned a new trend on the scene, which is the
mixed-use project. “We’re doing several projects now in shopping
centers,” he said. “While people are having a procedure done
that takes a couple of hours, the family members can have lunch
or go shopping. Location is key, especially in the South Florida
area. It’s almost turning into a retail-type situation.”
DEVELOPER ANNOUNCES KENDALL MEDICAL OFFICE CONDOS
Miami Today
By Marilyn Bowden
Flagler Development Group has announced plans for a medical
office condo building, One Seventeen Professional Arts Center,
next to Town & Country retail center in Kendall. The project,
which will consist of two four-story buildings with a combined
total of 133,000 square feet, will be east of Florida’s Turnpike
at Southwest 117th Avenue and 82nd Drive.
About 85% of the 69,590 square foot east building is pre-sold,
mostly to physicians, said Kenneth Weston, president of Kenneth
Weston & Associates, Inc., who is marketing the complex for
Flagler. “We do have some other professional users purchasing
space as well. The parking ratio is five spaces per 1,000, all
in covered parking and with direct access to both east and west
buildings,” he said.
The proximity to Town & Country Center is indicative of a
growing trend to integrate medical offices and retail
development, said Mr. Weston, whose firm has specialized in
healthcare real estate for more than 25 years, beginning with
the first medical office condominiums on the US East Coast.
While the office condo concept is new to many other
professional users in South Florida, Mr. Weston said, it’s been
popular within the medical profession for decades.
AN INSIDE LOOK AT THE HEALTHCARE REAL ESTATE INDUSTRY
South Florida Hospital News
By Lois Thomson
To a greater extent than ever before, the healthcare industry
seems to be closely linked to the real estate industry, and
nowhere more so than in South Florida. South Florida Hospital
News recently talked with four major leaders who are involved in
the healthcare aspect of realty, and learned their thoughts on
trends, changes and challenges in this hot topic area.
Kenneth Weston, President of Kenneth Weston & Associates, Inc. a
medical real estate broker, developer and consultant, has
specialized in healthcare real estate since 1978. The firms'
services include physician and healthcare facility
representation, project analysis and consulting, project
marketing, commercial condominium development and conversions
and fee development.
All four have a well established presence in South Florida and
beyond. In many cases their answers to the question are similar,
which isn't surprising, considering that all are familiar with
the industry and the market.
Is healthcare real estate currently experiencing a
boom, and if so, do you expect it to continue?
KW - One of the two points that has caused healthcare real
estate to change over the past decade is the emergence of
outpatient facilities. Procedures that were typically done on
campus are now being done outside of the hospital setting, in
the walk-in health care centers. The other (change) is the
emergence and growth of medical office condominiums.
But what you're finding now is the emergence of situations
where physicians have the option to purchase their own office
space as opposed to leasing space, and that's taken place
because of several issues. Over the past five years the stock
market has been somewhat unstable, so physicians were looking
for ways to diversify their income portfolio. Because of the
high cost of their tenant improvement allowances relating
specifically to plumbing, cabinetry, etc., those improvements go
with the space once (the physicians) retire or sell the
practice.
OFFICES PLANNED FOR MALL REVAMP
The South Florida Business News
By Paola Iuspa-Abbot
The Codina Group plans to build an office complex on 8.2 acres at the struggling Town & Country Center as part of its effort to revamp the mall.
Reconfiguration of the 19-year old retail complex’s 601,942 square feet of leasable space includes the addition of 134,000 square feet of medical office condominiums on open land and parking on the northeast corner of the center fronting Southwest 117th Avenue. The 25-acre Town & Country property spreads from Southwest 88th Street, or North Kendall Drive, to 82nd Street, and from 117th Avenue to the Florida Turnpike Extension.
“There is a demand for this type of product,” said Kenneth Weston, president of Kenneth Weston & Associates, Inc., a real estate broker in Miami. “The medical market in Kendall has a 97 percent occupancy rate.”
Weston, considered the czar of the medical office condo market, said he knew of Codina’s plan but declined to give details because he is in talks with the developer to market the offices. Weston said medical office buildings near Baptist Hospital make sense. Many medical professionals buy space ranging from 1,250 square feet to 12,000 square feet and pay from $225 per square foot to $275 per square foot for unfinished space or from $250 per square foot to $300 per square foot for finished space, Weston said.
HEAVY HITTERS IN HEALTH CARE
The South Florida Business Journal
KENNETH A. WESTON
President and CEO, Kenneth Weston & Associates, Inc.
- Web site: www.kennethwestonassoc.com
- Address: 7765 SW 87th Ave.,
Suite 100, Miami, Fl. 33173
- Phone: (305) 279-2700
- E-mail:
kweston@kennethwestonassoc.com
Nominations were invited from the public and those
included in this section were selected by the editor. Inclusion
is based on the applicant’s prominence, achievements and
community involvement.
Weston founded the firm in 1978 to serve the expanding and
specialized needs of the medical industry. An expert in medical
office developments, he has directed the development and
marketing of more than 10 million square feet of medical office
space.
Prior to his current position, he was VP of marketing and sales
for a commercial development company. Weston said his biggest
challenge was making the transition from commercial real estate
to medical real estate. He said his top goal in the next year is
“to have all of our existing medical projects sold out by
completion.”
Weston previously served on the Board of Directors of the South
Florida Epilepsy Foundation and the Board of Advisors of the
Commercial Real Estate Broker/Tenant Guides for Miami, Fort
Lauderdale, Palm Beach and Tampa.
OUT-OF-TOWN DOCTORS SHOW AN INTEREST IN HOMESTEAD MEDICAL
OFFICES
Miami Today
By: Sherri C. Ranta
Two new medical office-retail projects planned for Homestead
are attracting the attention of physicians practicing in other
parts of South Florida. “Doctors as far away as North Lauderdale
are looking at establishing offices to serve the growing
population in Homestead and benefit from the fall opening of the
new Baptist Health South Florida Hospital”, said Kenneth Weston,
a medical office real estate consultant and broker.
“Doctors look for satellite offices in fast-growing suburban
areas”, he said. “Wherever there are rooftops and people, those
people need services.”
Portofino Plaza and Portofino Professional Center are two
medical office projects in various stages of development near
Campbell Drive and Florida’s Turnpike.
MIAMI HAS COOLED - BUT ONLY SLIGHTLY
FEWER HOSPITAL PLANS ARE IN THE PIPELINE, BUT THERE’S STILL LOTS
OF ACTION
Healthcare Real Estate Insights
By: John Mugford
Two years ago, the Miami-Dade County healthcare development
scene was so robust that observers likened it to the “Wild
West.”
“It looks like most of the hospital systems have either
completed, started, or started to plan their major rounds of
projects,” said Kenneth Weston, a medical office developer and
consultant with Miami-based Kenneth Weston & Associates, Inc.
Mr. Weston has his hand in the marketing and development of
several medical office projects, including two near Baptist
Health South Florida’s future Homestead facility. One is the
Portofino Professional Center, a 60,000 square foot facility
being built next to the new hospital. The other is the 90,000
square foot Portofino Plaza, which also includes retail and
other space.
A DOCTOR IN THE HOUSE? YES, AND HE OWNS IT, TOO
The New York Times
By: Vivian Marino
About four years ago, Dr. Robert Vogt-Lowell started putting
money into what he now considers to be his best investment yet:
medical offices for his pediatric cardiology practice.
More and more healthcare professionals are making such
investments, snapping up everything from office condos to shares
in medical buildings and complexes. But they are hardly the only
ones buying. In the last 18 months or so, large investors like
pension funds, real estate investment trusts and private
companies have been expanding their holdings in medical office
buildings.
Kenneth A. Weston, a real estate consultant and developer whose
firm, Kenneth Weston & Associates, Inc. specializes in medical
office condos in South Florida, says the high prices in many
large metropolitan areas have pushed investors to look in
secondary or tertiary markets. (“People there get sick too,” he
said.)
The Miami market “is so hot that some people are buying
buildings with capitalization rates as low as 1 or 2 percent,
which is financial suicide,” he said. “They’re buying with the
idea of being able to create a condo complex out of it.”
Right now, around $375,000 to $675,000 buys a 1,500 square foot
office condo in the Miami area, he said, which is almost double
the average price of just three years ago.
There is no shortage of takers, though, at least for his condo
buildings. “When I do my medical projects, 50 percent are
pre-sold to users before we do the projects,” he said.
MEDICAL OFFICE ‘CONDO-MANIA’ IS GROWING
Healthcare Real Estate Insights
By: John Mugford
While they might not be the perfect prescription for all
physicians, medical office condos are becoming an increasingly
popular alternative for doctors who have traditionally leased
space in medical office buildings (MOBs).
“It’s getting so prevalent in the market right now that it
seems everyone wants to get involved in office condos,” says
Kenneth Weston, a long-time healthcare real estate consultant
and developer in South Florida and the founder of Kenneth Weston
& Associates, Inc.. “It’s like condo-mania.”
Even though Mr. Weston calls the current phenomenon a “mania”,
he also foresees a long future for medical office condos because
of the stability of physicians and other medical condo buyers.
On the other hand, things do not bode as well for general
commercial office condos, Mr. Weston says.
“One of the conditions that makes it right to introduce office
condos to a market is high demand for that type of product”, he
explains, “and developers are building general office condos in
places where the office market has 20 percent, 30 percent
vacancy rates. That just doesn’t make sense because the demand
is not there. The reason they’re doing it right now is because
the interest rates have been low.”
Mr. Weston began developing medical office condos in the Miami
area in the late 1970s purely because of demand – it was what
some doctors wanted. Because interest rates are so cyclical,
there are periods of time when the product type remains “under
the radar”, especially when interest rates creep upward, Mr.
Weston says.
DOCTORS
BUY INTO CONDO OFFICE SPACE
“WESTON SELLS DEVELOPERS ON MEDICAL CONDO CONCEPT”
South Florida Business Journal
By Brian Bandell
The same factors that have made residential condos hot are
keeping medical office condos on fire. About 1.4 million square
feet of medical office condo projects are planned in South
Florida, according to research by Miami developer Kenneth
Weston.
Weston already has a steady diet of offices he’s readying for
doctors, with four such projects he either owns or represents
breaking ground in the first quarter of 2005. Each project is at
least 50 percent pre-sold, said Weston. His company, Kenneth
Weston & Associates, Inc., also represents a builder with
preliminary plans for a medical office condo in Homestead. The
details of the project are still being worked out, but it would
be adjacent to the new 120-bed Homestead Hospital, which Baptist
Hospital is building on Campbell Drive east of Florida’s
Turnpike.
Weston keeps in contact with physicians who are cramped for
space or looking to expand. He targets fast-growing areas that
are underserved by medical offices. Medical offices have
specific requirements that conventional office buildings often
lack, Weston said. “Most developers aren’t experienced in
designing these buildings, “ Weston said. “A lot of the clients
we deal with overlooked these situations.”
“Ninety percent of the projects we are doing are medical office
condos,” he said. “Because of the low interest rates and the
instability of the stock market, physicians are diversifying
their investment portfolios."
CONDO
MOBS ARE HOT IN THE MIAMI AREA:
THEY ARE A VIABLE ALTERNATIVE TO LEASED SPACE FOR MANY LOCAL
PHYSICIANS
Healthcare Real Estate Insights
By: John Mugford
Kenneth Weston, a longtime developer of and consultant on
medical office building (MOB) projects, says pent up demand in
certain areas of Miami-Dade and Broward counties is leading to a
health dose of construction and plans for future medical
offices.
Even though the hospital scene is quite crowded in Miami-Dade,
there is demand for new MOBs, according to Mr. Weston, whose
Miami-based firm has specialized in medical office condominium
projects for two decades.
“The medical office market has been very strong over the last
five years,” says Mr. Weston, “and that’s because many growing
residential areas are lacking in supply. The people who live
there have to drive out of their areas to see physicians because
of a lack of medical office buildings.”
In recent years, demand for ownership of medical office condos
has been fueled by low interest rates, as well as a shortage of
medical spaces to lease and high rental rates. Even though
Miami’s regular office vacancy rate hovers around 20 percent,
there is much more demand for medical space, Mr. Weston says.
Mr. Weston says a major project, on which he declined to
elaborate, is in the works for a 15-acre tract near Miami
International Airport. He says the project could have hundreds
of thousands square feet of outpatient medical users, from
surgical centers to cancer treatment centers to any type of
medical concept one can conceive.
WESTON SELLS DEVELOPERS ON MEDICAL CONDO CONCEPT
South Florida Business Journal
By Brian Bandel
About 1.4 million square feet of medical office condo projects are planned in South Florida, according to research by Miami developer Kenneth Weston. The areas of South Miami, western Kendall, Miramar/Pembroke Pines and Boca Raton/Delray Beach have the most projects planned, he said.
Weston has a steady diet of offices he’s readying for doctors. With four such projects he owns or represents breaking ground in the first quarter of 2005. Each project is at least 50 percent pre-sold, said Weston. “Ninety percent of the projects we’re doing are medical office condos,” he said. “Because of the low interest rates and the instability of the stock market, physicians are diversifying their investment in portfolios.”
Weston keeps in contact with physicians who are cramped for space or looking to expand. He targets fast-growing areas that are close to hospitals and underserved by medical offices. Medical offices have specific requirements that conventional office buildings often lack, Weston said. Different medical uses also require certain physical features, such as reinforced floors to support heavy MRI equipment or higher ceilings in ambulatory surgery centers. “Most developers aren’t experienced in designing these buildings,” Weston said. “A lot of the clients we deal with overlooked these situations.” Weston said he has three projects on the table, with two of them likely to break ground within six months.
OFFICE CONDOMINIUMS: HOT TREND IN COMMERCIAL REAL ESTATE
Black’s Guide
Several factors contribute to office condos growing from a niche market into a more prominent segment of the commercial real estate industry.
In South Florida, approximately 2,000,000 square feet are in various stages of planning and delivery – whether new construction or conversion. Regardless of how much ends up actually delivered, more projects dot the landscape of South Florida. Whether you’re an owner, broker, tenant, or tenant rep, the trend impacts you. Over the last 3 years, we saw an increase in these transactions, but they are by no means new. In fact, as you bring more overseas headquarters and divisions into South Florida, know that these companies are used to and often prefer to own their space rather than lease.
More brokers and developers are expanding into this segment each day. Many you’ve seen in our guide since we began. But few have been engaged as long as Kenneth A. Weston who began offering commercial condos in 1978. He made it his niche to serve, dedicated Kenneth Weston and Associates, Inc. to them, and endured full cycles of fluctuations in interest rates, supply and demand. With perhaps the most experience having been intimately involved in their evolution in South Florida, we bring you his review of where the segment is and where it’s likely to take us
LOW
INTEREST RATES, FOREIGN INVESTORS DRIVE OFFICE-CONDO DEMAND
Miami Today
By: Shannon Pettypiece
Businesses owning their own office space is a trend that could
explode if interest rates remain low and foreign investment
high.
Demand is up with interest rates low, the stock market still
unstable and business owners looking to invest in real estate
they can use.
Mr. Weston is overseeing one of the largest office-condo
projects in the country at Red Road and San Remo Avenue in Coral
Gables, with 165,000 square feet. The first floor will be leased
to a Whole Foods Market. The five floors above it will be office
condos.
Many international business owners are accustomed to owning
their office space, which is common in Latin America, so the
Miami-Dade market for office condos is hot.
ON
CAMPUS MEDICAL OFFICES MOVING OFF CAMPUS
Florida Medical Business
By: Kenneth Weston
With changes in health-care services, some physicians are
focusing their practices on locations other than on-campus
medical buildings. Instead, they are treating their practices as
retail businesses, locating in growing suburban areas where
there is a shortage of medical providers - and successfully
capitalizing on residents and workers forced to leave the area
for health-care services.
As a result, there is a tremendous demand for medical office
space in many sub-markets. There is a tremendous increase in
medical construction in strong suburban locations. Existing
medical buildings are showing very high occupancy rates.
Locations with high visibility and easy access to major
transportation routes are in high demand.
The trend in more outpatient procedures also is having a
pronounced impact on the medical office industry. Physician
groups are using outpatient facilities for diagnosing and
treating more patients outside the hospital setting, attempting
to boost their profit margins and patient loads in outpatient
surgery centers they own.
Other medical projects regaining appeal are “medical campuses,”
which consist of a large concentration of medical facilities in
one location. Such facilities include virtually all medical
specialties, and are comprised of a cluster of freestanding
diagnostic and treatment facilities with physician office space
dispensed throughout. These types of facilities offer one-stop
shopping for medical care. Location is the key for this type of
project.
NOT
MARRIED TO THE M.O.B.: LIFE BEYOND THE MEDICAL OFFICE BUILDING
AmericanMedicalNews.com
By Mike Norbut, AMNews staff
Traditional settings aren't the only place for physicians to
practice. Some have successfully ventured into areas with high
visibility and plentiful parking -- strip malls. Leasing retail
space is not a widespread practice among physicians, but real
estate experts say there is a market for doctors and other
professionals because landlords see them as dependable,
recession-proof anchor tenants who will likely stay in the space
for a long time.
Meanwhile, some doctors -- especially primary care physicians
looking for ways to distinguish themselves from hundreds of
others in an HMO directory -- like having their names on a sign
people can see from the road and an office that is mere steps
from the parking lot.
"Family physicians almost have to treat their practices like a
retail business," said Kenneth Weston, president of Kenneth
Weston & Associates, Inc., a Miami-based health care real estate
brokerage and consulting firm. "They don't have to be on the
campus anymore, so they typically go where the population is
strong." Many times, that means following the suburban sprawl
surrounding many larger cities -- and locating in the ubiquitous
strip malls.
The disadvantages prompt many physicians to steer clear of
retail centers, experts say. But, there are favorable deals
available, especially while landlords seek tenants to fill their
empty spaces. Developers also have sensed enough of an interest
from physicians that some centers have dedicated the outparcels
-- corner sites normally set aside for banks or fast-food
restaurants -- for office buildings, Weston said.
MEDICAL
OFFICES ALIVE AND HEALTHY
