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This is Oaks' second San Antonio project in San Antonio and is expected toopen early to mid 2009. Committed tenant owners already include Alamo MedicalGroup and Urology San Antonio, with a planned magnetic resonance imaging (MRI)facility on the first floor.
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"The Westover Hills area has now become the center of the most dynamicgrowth area in San Antonio. Three major hospital systems -- CHRISTUS Health,Baptist and Methodist -- all have or will have a major presence in the area,"says Marty Wender, Westover Hills developer. "I am excited about the newmedical office building, and Oaks coming in to develop it," Wender adds.
Oaks' first San Antonio project in the Medical Center will include anambulatory surgical center, the developer also announced today. That facilityis a planned 105,000-square-foot, Class A medical office building located atthe corner of Floyd Curl and Hamilton Wolfe. In addition, Oaks is undercontract to purchase an existing building in Shavano Park and is assemblingtenants for locations in Stone Oak, downtown and near Northeast MethodistHospital. In April, Oaks closed on Post Oak Center North, a29,724-square-foot medical office building in Austin, Texas.
Oaks' unique tenant ownership structure is set up as a single purposelimited liability company (L.L.C.). Tenant partners split 50 percentownership interest based on how much space they occupy. While there is nocapital outlay required for pro rata ownerships, tenant partners may acquireadditional ownership through capital investment. Oaks retains only 25 percentownership and is responsible for professionally managing the asset over thelong term. Tenant partners receive distributions from operations andrefinancing as the value of the investment increases over time.
Sarah Teel, MSL Investments, represented Oaks and is the leasing agent forall Oaks' projects in San Antonio. The seller was self-represented.
As a testament to Oaks' long-range vision, the company has built andacquired 44 assets and retained them all in its portfolio. Over the years,Oaks has carefully structured its model to minimize costs and maximize returnson the assets it owns for its partners.
Such refinements include:
-- limiting partner risk by starting to build only after 50 percent ofthe building is pre-leased;
-- requiring a minimum of five parking spaces for every 1,000 square feetof building;
-- focusing on properties without restrictions or other limitingcovenants that would prevent the provision of ancillary services by tenants
-- multi-tiered exit strategies;
-- nesting of complimentary professions to create synergy, increasedpatient flow; and
-- designing buildings and practice combinations that enhance patientcare.
The company has found the model works equally well for new construction aswell as in the acquisition of existing facilities.
"Our approach relieves doctors of having to take time away from theirpractices to manage property, while still offering tax benefits and investmentincome," says Kerry Angus, partner in Oaks' Texas office. "We believe whendoctors focus on what they do best, they create value in the asset. Shouldn'tthey be the ones to benefit?" he adds.
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