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PONTIAC, MI-Ryan Cos. US Inc. is about to start work on a 100,000-square-foot new medical office building, that will go up not far from Interstate 75, just south of Great Lakes Crossing. With a confidential development with the city, the company plans to buy the 18-acre site, about a half mile west of the intersection of Joslyn Road and I-75 exit, and begin work on the four-story, $25-million facility by the spring.

Jim McDonald, director of development for Ryan, says his firm will own the facility when it is finished, and that about 40,000-square-feet are under letters of intent. “We’ve had discussions with a healthcare system about tenancy, and we look to carry those discussions into the first quarter of next year,” McDonald tells GlobeSt.com.

Medical office construction is still very strong, though the economy will likely slow new projects, he says. “It’s the same as any other sector right now,” McDonald says. “Healthcare groups are going to put a hold on capital expenditures, look at deals with a higher measuring stick and be more frugal. Deals are going to be tougher to do, and lenders are going to be more cautious, at least for the next six to eight months.”

The economy has hit its worst in Michigan, particularly in the Detroit area. While this project is in the far north suburbs of Oakland County, the state’s richest area, the land is also in Pontiac, known as one of the most challenged cities in Michigan. “We don’t have nervousness about the location,” McDonald says. “There is a gap, a need for medical office development here. Oakland County has great demographics, the site has great access to the highway, and the rooftops and retail make it a great site.” Great Lakes Crossing, a Taubman mall, is a relatively new, 1.4-million-square-foot center.

Mason Capitani, EVP with Troy, MI-based L. Mason Capitani, said in a statement that the vacancy rates for medical office remain relatively low, especially in northern Oakland, at reportedly around 11%. He is joined by Gary Grochowski, SVP, in leasing the facility.

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