At the CORE

Less than two years after its launch, Lakewood Ranch Commercial Realty's planned 265-acre health care- and life sciences-themed business park has landed its first medical-related projects.

Health care equipment supplier Mercedes Medical expects to break ground within 60 days on a new headquarters of 55,000 square feet, a building that will consolidate three Manatee County facilities.

Alex Miller, the company's CEO, says Mercedes Medical spent more than a year evaluating potential sites before deciding on a $10 million building in CORE, or Collaboration Opportunities for Research and Exploration.

“We really liked the idea of being a part of the new park, and we want to develop something beautiful and something that's also symbolic, in terms of growth, of where we're going as a company,” Miller says.

The company's building, which is being built to accommodate as many as 120 employees -- Mercedes Medical currently employs 65 — is slated for completion in the third quarter of 2018, Miller says.

Mercedes Medical's headquarters will be joined by a two-story medical office building being planned by developer Optimal Outcomes LLC — the first direct medical tenant planned for CORE. The St. Petersburg firm expects to begin construction on its 42,000-square-foot project by the end of this year.

In all, a trio of new developments — including an Earth Fare-anchored retail center — will bring nearly 250,000 square feet to CORE by the end of 2018.

HealthPark at Lakewood Ranch, the planned medical office building, also will be the first medical offices to be built in the 31,000-acre master-planned community since 2005, when the Lakewood Ranch Medical Center was completed.

Like Mercedes Medical's building, Optimal Outcomes expects to complete HealthPark by the end of next year.

“We think this building will fit in well,” says Ken Hughes, president of CNK Realty, a Lakewood Ranch commercial real estate brokerage specializing in medical office properties that is leasing HealthPark.

“Lakewood Ranch meets a lot of needs, for infrastructure and housing and amenities, and it's growing by leaps and bounds,” Hughes says.

The building's 10,000-square-foot surgery center also will be the first multispecialty operating facility within the community.

Hughes says the HealthPark space is being marketed for roughly $25 per square foot on a triple-net basis, with operating costs of about $8.50 per square foot.

While that rate is higher than typical office space in Sarasota and Manatee counties, which Lakewood Ranch straddles, medical office space often is specialized and requires higher finishes and a higher level of interior build-out.

HealthPark also will have a covered drop off area for patients, a design that also is typical for medical offices.

To compensate for the elevated rent rate, Optimal Outcomes is providing tenants an average of $55 per square foot of tenant improvements, money that is invested in a tenants' space at the outset of occupancy and amortized throughout the course of a lease. Tenant improvements for office space are often less than half that amount.

So-called “T/I allowances” for the surgery center space could go as high as $200 to $300 per square foot, Hughes says, depending on the type of use.

“The shell and the common areas of HealthPark will be constructed to a much higher finish than a typical office building,” Hughes says. “And that's because medical buildings usually have more traffic than a normal office and so you need to build them to withstand more people coming in and out.”

HealthPark at Lakewood Ranch marks the latest in a series of Optimal Outcomes' medical projects. In all, the company has developed in excess of 1 million square feet.

Previous developments have included a 50,000-square-foot building for Florida Cancer Specialists & Research Institute, in Fort Myers; Tradition HealthPark One and Two in Port St. Lucie, totaling 102,000 square feet; a 39,000-square-foot building in Brandon; and a pair of projects in Tampa, according to the company's website.

HealthPark at Lakewood Ranch and Mercedes Medical's project follow a third development, a 150,000-square-foot retail center being developed by Orlando-based Tavistock Development Co.

In addition to organic grocer Earth Fare, the project will be occupied by LA Fitness and a series of health-related merchants and restaurants.

Tavistock, which spent $8 million in May to acquire 42 acres within CORE, also plans to develop a 294-unit apartment complex there.

“To attract users to CORE, Lakewood Ranch Commercial determined there had to be adequate amenities in place,” Hughes says. “The whole concept is to develop a very walkable project with open space and in which restaurants and other retail meshes well.”

In all, Flad Architects of Wisconsin is designing CORE to contain as much as 4.5 million square feet, which will be developed over two decades.

Ultimately, Lakewood Ranch Commercial hopes to cluster enough life sciences uses and businesses to attract a university or research hospital to CORE.

“We're very happy with the activity that we've seen at CORE to date,” says Kirk Boylston, Lakewood Ranch Commercial's president. “And we have a number of other exciting projects there we're working on.

“But medical projects take a long time, and we knew going in that this was going to be a long-term project that would take years possibly to really see the fruits there.”