Real Estate Development Associates LLC (REDA), a diversified investment company that acquires and develops industrial and office properties in Southern California, has completed the development of Newport Heights Medical Campus, a 59,978-square-foot medical center in the Santa Ana Heights area of Newport Beach, California. The property, which is set to open in July, is 65 percent leased with deals pending to bring it to over 95 percent leased.
The campus consists of two class-A buildings totaling 59,978 square feet. Building One, located at 20350 Birch Street, is 18,303 square feet, and Building Two, located at 20360 Birch Street, is 41,675 square feet. Both buildings benefit from a 5:1,000 parking ratio and feature lush landscaping and outdoor courtyards. Each building is designed for OSPHD-3 licensed medical clinics to support numerous uses including outpatient and cosmetic surgery.
Major tenants for the buildings include the UC Irvine Health, Starpoint Health, California Foot and Ankle Institute, and Goretti Ho Taghva, MD, Inc. The remainder of the space is being targeted for an urgent-care facility and pharmacy.
“This property fills a need in this area of Newport Beach, which is lacking for options for patient services,” says Jason Krotts, co-founder and principal of REDA. “As evidenced by the relatively high lease rate, we believe this location will not only be a successful real estate endeavor, but also provide opportunity for medical operators looking to break into this desirable market.”
REDA reports that there is currently 1.55 million square feet of medical office space in the greater Newport Beach and Costa Mesa region, with second-generation medical space vacancy at sub-5 percent, the lowest in the county, according to Cypress West Partners. Due to the low vacancy rate, many quality medical-office buildings in the area are experiencing a waiting list of tenants.
“The medical office building market has an urgent need for new construction,” says Krotts. “With a slew of new codes and regulations coming into effect, many older medical tenants, especially older compounding pharmacies, are struggling to keep up to date. We have taken great care in designing a project that not only provides the right type of space for these unique tenants, but also improves the surrounding community and creates a sense of place for patients and customers.”
Bryan McKenney, director of brokerage services at Cypress West Partners, is handling the leasing of the project, and Ware Malcomb is the project architect. Millie and Severson served as the general contractor, and financing was provided by Bank of the West.
“There is a shortage of quality medical office space in Newport Beach, in general, and especially large blocks of space that would allow new programs, combination of practices and new market entrants,” says McKenney. “The submarket has great demographics, great practitioners, and a great city brand. We now have a place where the medical community can serve its patients and the broader market as the medical landscape continues to evolve. As medical services become even more focused on the patient experience, we are delivering a project that is top quality, has easy parking and easy access for patients – the foundation of a successful medical building.”
This project completion is one of many in REDA’s active pipeline. The firm recently recapitalized the West Ontario Commerce Center, a 2.6 million-square-foot industrial project in Ontario, California. REDA also recently broke ground on the Perris Gateway Commerce Center in Perris, California, a 400,000-square-foot industrial project. The firm has a pipeline of industrial project in excess of 3 million square feet in the planning stages and is currently seeking new investment and development opportunities where it can create value through transformation.