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THE WOODLANDS, TX-The lease-up of a six-building, 350,000-sf medical office portfolio in the submarket has spurred a local developer, Tom Pisula Development, to plan his next projects. The 100,000-sf Medical Arts Center III will break ground in late 2008 while an as-yet unnamed 80,000-sf medical office building will begin to rise in early 2009 in the far north submarket.

Les Johns, a partner with Pisula Development and owner of sister company Pinecroft Realty, is preleasing Medical Arts Center III, which will go up on five acres along St. Lukes Way near Texas 242 and Interstate 45. The second project will have a 3.5-acre position along Pinecroft Drive near Memorial Hermann’s Woodlands Hospital in nearby Shenandoah. He says the buildings are already more than 50% committed and most likely will be fully leased by the time they are completed in mid-2010.

“You can’t buck demographics in the sense that the area is continuing to grow,” Johns says. “Though this is a family community, as the general population continues to age, you’ll see that trend impacting the medical community throughout the United States.”

Construction costs have not yet been set for the two buildings. Their quoted rate hovers $20 per sf, triple net. Houston-based Browne Penland McGregor Architects designed both structures. Their general contractor hasn’t been selected.

Pisula Development and Pinecroft Realty have developed in recent years and still own nine medical buildings in the far north submarket. Johns tells Globest.com that, in addition to looking at opportunities locally, he and Pisula are beginning to target other cities in Texas, including Houston and San Antonio.

“We’re not only looking at development of our own, but appropriate acquisitions of medical buildings,” Johns says, adding the sweet spot is medical-related developments between $10 million and $15 million. “Our ideal is the value-add or existing projects that have additional land for future development,” he adds.

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