As a developer, buyer, owner and manager of medical office buildings (MOBs), Chicago-based HSA PrimeCare continues to go about its business somewhat quietly. That doesn't mean, however, that the firm, which can be defined as regional in scope, doesn't have plans for growth.
It's just that officers with HSA PrimeCare and its parent company, HSA Commercial Real Estate, say they're looking to grow the healthcare real estate firm in a measured way.
As a number of other healthcare real estate companies, real estate investment trusts (REITs) and investors have become larger through mergers, acquisitions and joint venture partnerships, they have created plenty of competition for the pricier portfolio acquisition opportunities and the larger development deals.
In the meantime, officers with HSA PrimeCare say their firm is content, at least for now, to focus on the small- to mid-level development and acquisition opportunities, building relationships that can lead to more business with health systems, physician groups and other providers along the way.
“We're seeing the landscape change a bit, as a number of the big (healthcare real estate developers and investors) have gotten quite a bit bigger,” says HSA Commercial CEO Bob Smietana. “We like to think that we can be a little more nimble and perhaps do a good job of providing services in that middle sector. At the same time, while we're not massive, we're also not a startup.”
In other words, HSA PrimeCare is capable and sufficiently well-capitalized to take on larger deals.
In recent months, however, the firm stuck with its plan of finding small- to mid-level opportunities. In late 2012, it paid $3.7 million for a new 24,178 square foot outpatient clinic in a Milwaukee suburb that's fully occupied by Aurora Health Care.
And in recent weeks, the firm announced that it plans to start development in March on a 15,000 square foot, $10 million multi-specialty surgery center in the northern suburbs of Chicago. The facility is 100 percent preleased to Hawthorn Surgical Associates.
Since its founding in the early 2000s, PrimeCare has developed more than a dozen healthcare facilities, acquired a number of others, monetized a few buildings, and provided advisory services to a variety of clients. More projects and acquisitions are in the pipeline.
As of late 2012, HSA's medical portfolio composed 17 owned buildings with a total of 850,000 square feet – figures that continue to grow. Most of its facilities are in Illinois, Indiana and Ohio, with the exception being a fully occupied building in Melbourne, Fla., acquired in a partnership with Chicago-based Harrison Street Partners.
“Our model is really a relationship model,” says John Wilson, president of HSA PrimeCare. “We're certainly willing to work with a system that might just be starting a new outpatient program with one of those smaller clinics… Even a small project can help us get to know a system better and allows them to get to know us and our capabilities. And that can, and often does, lead to more business.”
John 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.
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