Healthpeak plans medical office in McKinney
Five-story, $31M build adds to Dallas-Fort Worth’s robust medical office market
As the DFW population grows, so does the demand for healthcare services and a need for medical facilities.
Healthpeak Properties, a real estate investment trust that owns and develops properties in the life science, medical office and retirement sectors, is taking full advantage.
The firm’s latest Metroplex build will be a five story, 125,000-square-foot medical office building at the Medical City campus in McKinney, at 4510 Medical Center Drive, according to a Texas Department of License and Regulation filing. Construction is set to begin in September and last until 2025. The facility will cost $31 million to construct, according to the filing.
An exact location was not immediately clear, but a number of undeveloped plots are available adjacent to the hospital’s sprawling campus. Leasing figures are not yet available, but Collin County medical office buildings typically rent for about $25 per square foot, according to JLL.
Medical City McKinney is a 285-bed acute care hospital and Level II trauma center that is the leading inpatient behavioral health provider in Collin County, according to the company’s website.
Aside from the population boom, the healthcare real estate renaissance in North Texas is being fueled by aging residents and an increase in the popularity of telemedicine services, according to a report by Partners Real Estate. While it may typically have a smaller earning ceiling, the medical office market is a much more stable and safe investment than the regular office market, the report states.
As office net absorption has plummeted into the negatives across all of Texas’ major metros to begin 2023, medical office absorption has remained steadily in the black. DFW had a positive medical office net absorption of 163,000 square feet at the start of the year, according to JLL.
In DFW, office vacancy rates are nearing 20 percent in DFW, while medical office hovers around 13 percent. DFW has the most medical office inventory in the state with more than 56 million square feet and more than 1 million square feet in the 2023 construction pipeline, the Partners report shows.
McKinney, about 30 minutes north of downtown Dallas is one of the metroplex’s most popular submarkets and currently ranks as Collin County’s third-largest city, after Plano and Frisco. McKinney was the nation’s fastest-growing city from 2000 to 2003 and again in 2006, among cities with more than 50,000 people, according to the U.S. Census Bureau.