104-Acre Hospital HQ in Alabama Snapped Up in Sale-Leaseback Deal
- Jan 23, 2008
Daniel Corp. has just committed to acquiring HealthSouth Corp.’s headquarters campus in Birmingham, Ala., in a $43.5 million deal. Terms of the definitive agreement allow the health company to continue to occupy its 200,000-square-foot office building under a sale-leaseback arrangement. Financial terms of HealthSouth’s long-term lease with Daniel Corp. have not been disclosed; however, Class A office space in the city leases for about $21 per square foot, according to a fourth quarter 2007 report by corporate real estate service advisory firm CresaPartners. In addition to HealthSouth’s 13-year-old headquarters building, which occupies 85 acres, the transaction will include an adjoining 19-acre parcel that is currently home to an unfinished hospital facility HealthSouth was in the midst of building for $200 million. Daniel plans to complete development of the structure to be marketed as yet-to-be-defined commercial space. HealthSouth will retain a 40 percent interest in the development project. Other plans for the campus’s undeveloped land in the near future may include a hotel and additional office space. “I’ve heard there may ultimately be about 1 million square feet of office space, as well as multi-family and retail segments, but I think they’re still working out the details,” Patrick Denney, managing principal with CresaPartners, told CPN today. “It will probably be a while before they actually begin developing that amount of office space; they might do a hotel and an office building in the interim.” Given the current state of the Birmingham office market, HealthSouth’s decision to stay put in its current home appears to have been a wise one. “We don’t have large blocks of space in Birmingham’s central business district or in the suburbs; particularly not in the submarket where the HealthSouth property is located, which is extremely tight,” Denney said. For its part, Daniel Corp. has picked the right property at the right time. “With the downturn in the market, they got a great deal on it.”Headquartered in Birmingham, Daniel Corp. is a full-service real estate company with a portfolio of upscale apartment properties, senior living communities, residential golf communities, as well as office developments in the Southeast and Mid-Atlantic regions. Since its inception in 1964, the company has developed or acquired approximately 8.6 million square feet of office space, 8,000 multi-family units, 2,000 senior living residences and 10,000 acres of land for office and master-planned community projects.