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$20 million project is cheaper than leasing

Burl Rolett January 17, 2014 0

A rendering of the planned three-story, 63,000-square-foot orthopedics and sports medicine building. (Courtesy of OrthoVirginia)

A rendering of the planned three-story, 63,000-square-foot orthopedics and sports medicine building. (Courtesy of OrthoVirginia)

Tally another medical office deal for the Lingerfelts.

The Richmond-based office real estate firm Lingerfelt Companies will break ground this month on a $20 million project to be owned and occupied by OrthoVirginia.

The three-story, 63,000-square-foot orthopedics and sports medicine building will be next to Bon Secours Memorial Regional Medical Center in Hanover County.

OrthoVirginia administrator Jim Perkins said the location would allow the company to vacate space it is leasing, including real estate in Memorial Regional Medical Center, while staying near the needed services offered by a full hospital.

OrthoVirginia's  building at Boulders Office Park. (Photo by Burl Rolett)

OrthoVirginia’s building at Boulders Office Park. (Photo by Burl Rolett)

“It’s hard to find the right situation for the practice,” Perkins said. “The space was available and it could be done, so we can economically build this building and it will actually cost us less than leasing.”

The land for the project is owned by the Lingerfelt Companies and OrthoVirginia, although the medical practice will foot the bill for most of the $20 million investment. The project is being financed through a combination of cash and equity, and StellarOne made the loan.

Construction is scheduled to finish in December. Price Studios designed the structure, DPR Construction will build it, and Rummel, Klepper & Kahl is the development’s engineering team.

OrthoVirginia is a private, independent medical practice made up of 47 orthopedic specialists. Perkins said the group has offices at most Richmond area hospitals. OrthoVirginia and Lingerfelt Companies also built a 70,000-square-foot standalone location at Boulders Office Park about three years ago.

The announcement comes just weeks after the Lingerfelt Companies broke ground on the first of three 60,000-square-foot medical office buildings at the Notch at West Creek in Goochland County. That project will cost about $17 million, and medical practice MEDARVA will be the lead tenant for at least the first building.

The medical real estate market has picked up in recent years, nationwide and in Richmond. Locally, the VCU Health System has a children’s hospital on the rise across from city hall, and developer Bob Atack has plans for a medical office development on 70 acres just west of Short Pump.

Lingerfelt Companies principal Ryan Lingerfelt said his firm doesn’t expect the medical office market to cool off anytime soon.

“We love the medical office building business,” he said. “It’s going to be hot for the next 10 years because of the aging demographic in the country and the increase in medical services that will be needed.”

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