[IMGCAP(1)]RICHMOND, VA-Henrico Doctors’ Hospital and Trammell Crow Co. have broken ground on a medical office building here that is already 40% preleased, according to Jennifer Dresback from Trammell Crow Co., who is handling the leasing for the building. Development costs for the 95,000-sf, four story, class A medical building are roughly $21.5 million, she tells GlobeSt.com.

[IMGCAP(2)]Trammell Crow is developing the building with Henrico Doctors’ Hospital on behalf of Partners Health Trust, a state retirement system advised by Morgan Stanley Real Estate that is wholly-owned by Trammell Crow. Called Forest Medical Plaza, the new building is located on the Forest Campus of Henrico Doctors’ Hospital. It is scheduled to deliver in early 2009 and will provide space for physician offices, hospital services, including a proposed hospital ambulatory surgery center and on-site pharmacy.

The developers are expecting that the facility will be fully leased by the time it opens, D. Reid Townsend, SVP with Trammell Crow Co. says. “Physicians are attracted to the location, economics and the option to participate in equity ownership of the building.”

Indeed, this niche in the office asset class has been a strong performer in many markets, targeted by funds, institutional investors and local developers alike for its strong dynamics. Last month, to name one example, Harrison Street Real Estate Capital, based in Chicago, and Montecito Medical Investment Co., based in Santa Barbara, CA, formed a $500 million joint venture to acquire a portfolio of medical office properties.

Health care-based economies, in general, are also doing well, thus further supporting such investments. Henrico Doctors’ Hospital has been experiencing significant growth from the expanding community, according to David Williams, CEO of Henrico Doctors’ Hospital. The new project, he says, “is an important addition to the hospital and our goal to remain one of America’s 50 best hospitals.”

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