MedCore Partners Breaks Ground on Austin-Area MOB
- Apr 09, 2020
The high-demand medical office building market in metropolitan Austin, Texas, will soon be enhanced by 29,600 square feet, courtesy of a new ground-up development. MedCore Partners has recently broken ground on Hill Country Medical Plaza, a state-of-the-art MOB at 1411 Medical Parkway in Cedar Park.
Hill Country will sprout up roughly 20 miles north of downtown Austin on a nearly 3-acre site at the gateway to the 93-bed Cedar Park Regional Medical Center at Medical Parkway. The two-story building, designed by Felder Group Architects, has already commanded the market’s attention, reeling in prelease agreements accounting for 77 percent of the Class A property. Texas Digestive Disease Consultants, Hill Country Endoscopy Center and a compounding pharmacy are among the tenants that have made early commitments to Hill Country.
“The robust early leasing activity that we have experienced for our new medical office building underscores the exciting growth trajectory that Central Texas has enjoyed and appears poised to continue enjoying for some time,” Wes Johnston, development manager with MedCore Partners, told Commercial Property Executive. The metropolitan Austin market recorded a direct occupancy rate of 91.6 percent at the close of 2019, and Cedar Park saw its occupancy rate reach 91.9 percent, according to a report by Transwestern.
However, MedCore believes it had more than positive fundamentals on its side in its bid to lease-up Hill Country. “I would be remiss if I did not acknowledge that some of our early leasing success can also be attributed to the fantastic job our partners have done in helping us plan, design and build an exemplary facility that stands out from the crowd—even in this superb market,” Johnston added. IE2 Construction Inc. is serving as general contractor for the Hill Country project. If all goes as planned, development of the MOB will reach completion in October 2020.
Experts expect the coronavirus to spark a major recession, and the real estate industry, as is the case in any severe economic downturn, will not go unscathed. Some sectors will fare better than others, and MOBs could be one of those sectors. Spurred by the aging population and the rise in the use of health insurance, MOB occupancy levels have not dropped below 91 percent since 2009, as advisory firm HB Real Estate notes in recent research. However, no one forecasted COVID-19.
“I think there is little doubt that the pandemic’s impact will be felt for some time, even after we begin our tentative return to normalcy,” Johnston remarked. “With that being said, MedCore Partners remains incredibly optimistic about the enduring demand for medical office building products stemming from the strong fundamental patient needs that have allowed the MOB submarket to thrive over the last several years.”