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WILLOWBROOK, TX-A local developer has broken ground on a 45,000-sf medical office building near Methodist Willowbrook Hospital in the northwest submarket. The project, already 35% preleased, will deliver in first quarter 2008.

The developer of record, Woodwill Medical LLC, has secured $6.74 million or 75% of the cost to develop the first phase of Woodwill Medical Offices along Hargrave Road, according to Paul Gardaphe with iCap Realty Advisors’ Houston office. He says the three-year financing’s interest rate, adjusted quarterly, is 225 basis points over the 90-day Libor. Amegy Mortgage Co. LLC, iCap’s affiliate, provided the construction loan, closing the deal in 60 days.

Gardaphe says the developer bought 6.91 acres in January and divvied the land into two development sites, getting an infill site right across the highway from the 122-bed Methodist Willowbrook Hospital at 18220 Tomball Pkwy. “This is the last property around the hospital campus that’s entitled for medical office,” Gardaphe tells GlobeSt.com. “This campus doesn’t have that much area because of housing and commercial. He was fortunate to get this.”

The site acquisition also ended up a coup because the hospital board has been buying as much as it can in the immediate vicinity, Gardaphe adds. Hospital officials recently acquired a 75,000-sf office building on 6.1 acres at 13801 Centerfield Dr. from Houston-based MetroNational Corp. and a 129,000-sf, five-story MOB along US Highway 249 from locally based Pacifica Foundation Inc.

Woodwill Medical Offices’ first phase will take down 3.3 acres of the tract. The second phase’s construction start will be “user-driven,” Gardaphe stresses. The strategy is to provide only office space for the suburban medical pocket, where the average rental rate is $18 per sf, triple net.

Browne Penland McGregor Stephens Architects Inc. designed Woodwill Medical Offices. Metzger Construction Co., also from Houston, will build it.

Gardaphe says the developer, who prefers to keep a low profile, is marking his “fourth or fifth” medical office project, all iCap-funded deals for a historical long-term holder. “Once it’s completed and stabilized, then we’ll roll it into a perm for him,” the loan arranger says.

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