BREAKING NEWS

Toll Brothers debuts 55 and up community in Houston

What Led the ‘Joy Score’ in Home Remodeling?

Underpassage: The New Experiential Entry Portal Into Downtown

RNR Real Estate Briefs – Texas & more

Lender Takes Ownership of Houston Center Complex

The World’s Most Important Skyscraper is For Sale

REALTY NEWS REPORT - Logo

Downtown Houston
RNR-RalphBivinsProject-Interviews
  • Home
  • Categories
    • Breaking News
    • Houston
    • Residential
    • New Development
    • People
    • Office
    • Multi-Family
    • Capital Markets
    • Texas
    • Retail
    • Hospitality
    • Industrial
    • Land
    • Lease Brief
    • Medical
    • National
    • Realty News Report
    • Trades
    • Uncategorized
  • Archive
  • Subscribe
  • The Ralph Bivins Project
  • About
  • Contact
FacebookLinkedinYoutubeEmail
REALTY NEWS REPORT - Logo

A Profitable Prescription: Spec Medical Office Buildings

by Realty News ReportOctober 16, 2015
Share0
Eric Johnson, national director for Transwestern’s Healthcare Advisory Services Group
Eric Johnson, national director for Transwestern’s Healthcare Advisory Services Group

KATY, Texas – The practice of building speculative medical office buildings — without tenants signed up in advance — was put on hold during the recession when both developers and lenders were looking to cut their risks.

But developers in certain markets around the nation  — Houston included — are breaking ground on new projects without having tenants lined up to occupy a big chunk of their new building.

One example is Katy Medical Plaza, Phase II, a 47,000-square-foot medical office building under development at Cobia Drive and Kingsland Boulevard in Katy by Friendswood-based Jacob White Construction Co.

Slated for completion in early 2016, the project broke ground in January 2015 without any tenants signed on. It’s currently 25 percent leased, with asking rents of $30 per square foot, NNN, according to Eric Johnson, national director of the Healthcare Advisory Services Group at Transwestern in Houston, which represents the developer.

Demand for medical space is so strong in this Houston submarket that the developer assumed the risks inherent in building on spec, Johnson said. “The medical office occupancy in this submarket surpassed 95 percent, and there was no additional supply under construction,” he said. “Several large hospital systems recently built new hospitals in the area and underestimated the demand for medical office space.”

Johnson said that building on spec allows a developer to capitalize on rising rents during the 15- to 18-month period it typically takes to construct a building in Houston.

“Developers are seeing rent growth within their own existing projects,” Johnson said. “They have existing buildings that are full, and they’re seeing prospects being turned away. The patients are here, so they’re making an educated guess that even with higher rents than other projects, they will still meet the current demand.”

By Robyn A. Friedman – Oct. 16, 2015

Share0
previous post
Marathon Oil Tower Expected to Fetch $300M; And Change Houston’s Investment Narrative
next post
Skanska’s Energy Corridor Office Building Tops Out

Related posts

Toll Brothers debuts 55 and up community in Houston

Realty News ReportMay 6, 2025

What Led the ‘Joy Score’ in Home Remodeling?

Realty News ReportMay 6, 2025

Underpassage: The New Experiential Entry Portal Into Downtown

Realty News ReportMay 3, 2025May 5, 2025

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

Search News

CommGate
new version
ECD-RealtyNewsReport-Ad-300x250
Partners Ad
CBRE Ad
Arch Con Corporation Ad
Hines Ad
Avera Ad
RNR Ad 030124
Ziegler Cooper Ad
Lee & Associates Ad
2021 Realty News Report Ad
RNR - Lincoln Property Company
Hal Gordon - Property Tax Lawyer
Hunington Ad
230725-RNR_Digital-Ad_Red
Hunington Ad

Let's Connect

logo
About US
Author Ralph Bivins is editor of Realty News Report, which covers regional and national news. Bivins recently received the Gold Award for Best Column in the National Association of Real Estate Editors Journalism Competition. Contact us
Follow us
FacebookLinkedinYoutubeEmail
@2022 All Right Reserved. Powered by CGS Digital Marketing
REALTY NEWS REPORT - Logo
FacebookLinkedinYoutubeEmail
  • Home
  • Categories
    • Breaking News
    • Houston
    • Residential
    • New Development
    • People
    • Office
    • Multi-Family
    • Capital Markets
    • Texas
    • Retail
    • Hospitality
    • Industrial
    • Land
    • Lease Brief
    • Medical
    • National
    • Realty News Report
    • Trades
    • Uncategorized
  • Archive
  • Subscribe
  • The Ralph Bivins Project
  • About
  • Contact