A magic pill?

While other industries are still struggling to recover from the economic malaise of recent years, the commercial construction industry found a magic pill for its ailments in the form of medical center construction. In Richmond, health systems and medical providers have been on a building spree, putting up outpatient satellite facilities one after another.

“A lot of the developers out there have been focusing on medical lately because, I think, it’s the only active industry right now,” says Jimmy Stanley, managing partner of Henrico-based Stanley Shield Partnership. “Retail dived for quite a while, and now it seems to be starting its comeback, and general office seems to be coming back a little bit, but we’re not seeing major spikes.”

Stanley’s company is developing the $50 million, 160,000-square-foot Short Pump Medical Center complex near Short Pump Town Center in cooperation with the Virginia Beach-based Breeden Co. real estate firm. No tenants have been announced yet, but Stanley plans to open the first of three medical office buildings on the site by early 2015.

Several factors are driving the medical building boom. Foremost among them, says Kevin W. Barr, CEO for Bon Secours Virginia Ambulatory Service Operations, are an increased need for services among the aging baby boomer population. In addition, health systems also are moving toward an outpatient care model, where convenient access to care is paramount for customers.

Even more medical development in the capital region could be fueled in the future by Virginia Commonwealth University Health System’s plans to develop an independently run, freestanding children’s hospital.

“The whole notion of increasing care in the community is just so essential today,” Barr says, noting that Bon Secours has built outpatient complexes strategically located near major population and retail centers in Henrico and Chesterfield counties. “Hospitals will renovate and improve their campuses, but in terms of expansion, it’s in the community and that’s all about access.”

New medical complexes also tend to drive retail. In fact, James W. Theobald, chairman of the Richmond law firm Hirschler Fleischer, says it’s “very synergistic” for developers and businesses to build around medical facilities. Patients and medical employees “may do everything from buying prepared foods to getting a haircut and picking up their dry cleaning,” Theobald says.

His firm does a lot of real estate representation for companies like Henrico-based Atack Properties, which is working with Bon Secours to build Bon Secours Short Pump, a $50 million, 115,000-square-foot “medical village” located at West Broad Street and Route 288. It will include a freestanding emergency room, medical offices, outpatient surgical services and MRI and CT scanning facilities.

The medical village concept isn’t limited to Richmond. Bon Secours built an outpatient health center in Suffolk five years ago similar to the project under development at Short Pump: “It’s a full-service campus,” Barr says. “It has everything but the beds.”

Virginia Beach Mayor Will Sessoms has been talking up the idea of developing 1,100 acres of unused city land in Virginia Beach’s Princess Anne Commons into a health-care cluster containing not only providers but medical research facilities. Princess Anne Commons already is home to Sentara Princess Anne Hospital and the nonprofit organ procurement organization LifeNet Health.  Roanoke-based Medical Facilities of America also is building a $17 million, 120-bed rehabilitation center there.

In the Richmond area, other notable medical projects under development include the 66,000-square-foot Medarva Stony Point Surgery Center at the Notch at West Creek, a mixed-use development near the Henrico-Goochland line off West Broad Street. Henrico-based developer The Lingerfelt Cos. is constructing the surgical center as part of a planned complex of three medical office buildings.

Lingerfelt also is building a $20 million, 63,490-square-foot orthopedics and sports medicine rehab facility in Hanover County for OrthoVirginia and Bon Secours.

“Over the past five years, we have developed eight medical office buildings, totaling over 670,000 square feet, valued at approximately $225 million,” says Lingerfelt Cos. Principal Brian Witthoefft. “… Richmond is fortunate to be blessed with such strong health systems that support that kind of growth here locally.”