BUFFALO, NY-Leasable space isn't the only thing in strong demand when it comes to a future medical office building under construction within a bustling medical district in Buffalo. Until recently, many investors were also clamoring for an ownership stake in the future outpatient and research building, according to the firm hired to recommend a financial partner.

The future six-story Conventus, a $100.7 million, 300,000-square foot MOB and research facility, is scheduled for completion in spring 2015.

The developer is a local firm, Ciminelli Real Estate Corp., which worked with Buffalo-based Kaleida Health and the University at Buffalo medical school in planning the outpatient services and research building. Kaleida's 501-bed Buffalo General is the main acute care hospital within the 120-acre Buffalo Niagara Medical Campus (BNMC), which is home to 4.5 million square feet of healthcare space.

In recent weeks, Ciminelli chose White Plains, NY-based Seavest Healthcare Properties LLC as its financial partner for Conventus. New York-based Hammond Hanlon Camp (H2C) helped the developer find the joint venture financial partner.

According to Jay J. Miele, a managing director with H2C, “there were a number of compelling, other potential partners for the project – a lot of interest, and from a variety of interested types of groups.”

As the financial stack works out, Ciminelli landed a construction loan in the amount of $73.7 million and is putting $9 million of equity into the project. Seavest is investing $18 million, meaning its ownership stake will be 66%. H2C will also help line up permanent financing at a future date.

“We just consider it a fantastic project,” says Jonathan L. “John” Winer, executive vice president of Seavest. “We like getting involved in joint ventures with quality development firms doing projects that are critical to the delivery of care in a certain area for major health systems. And this project certainly does that.”

Winer notes that preleasing activity, which is being handled by Ciminelli, was at about 68% as of recent weeks. Judging by how the project is being received, officials expect Conventus to be virtually 100% leased by the time it opens, perhaps sooner.

“There really is no competition for this building,” Winer notes, adding that it will offer the “only” space of its quality on the BNMC. He expects tenants to include physician groups, research firms, medical device companies, and others.

The largest tenant, at 30%, will be Kaleida Health, which is building the future John R. Oishei Children's Hospital adjacent and connected to Conventus. The next largest will be UB, which will occupy about 20 percent and is building its new home, a $375 million, 520,000 square foot replacement facility, across the street from Conventus.

The architect for the MOB is Buffalo-based Kideney Architects; the general contractor is also a local firm, LPCiminelli.

John B. Mugford is the Editor of Healthcare Real Estate Insights™, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.

Instant Insights /

Seavest Completes Capital Stack For Healthcare Project

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