A local developer has announced a major project some hope could signal the start of a new cycle of medical office development in the central Perimeter market.
Kirk Demetrops, president of MidCity Real Estate Partners, says the $36 million development will consist of seven buildings located in the northwest corner of Ga. 400 and North Hammond Drive. The complex also offers frontage on Barfield Road and Ga. 400, he said.
“Obviously with the big vacancy of office space in Atlanta, it’s a cyclical thing,” Demetrops said. “People in this community have been looking to attract good firms to fill that.”
The development will be called Hammond 400. The site formerly housed the Sandy Springs Police Department and was the headquarters of RTM Restaurant Group.
Demetrop’s project will benefit from proximity to Pill Hill, the nickname for the hospitals located near Ga. 400 and I-285. The hospitals are Children’s Healthcare of Atlanta, St. Joseph’s Hospital, Northside Hospital and the Emory Clinic. He said MidCity is putting together deals with companies looking to be close to the hospitals, but not directly on Pill Hill.
Todd Perman, executive managing director of Global Healthcare Services, a real estate broker representing companies in medical office and hospital deals, said the Pill Hill hospitals draw patients from around the region. He said business has picked up and nationwide his company has been involved in $400 million worth of transactions within the last year.
The central Perimeter office market is low on space, so redevelopments will become more common as demand increases.
“You’re going to see reuse and redevelopment and redeployments on Ga. 400,” Perman said. “You’re always going to look for options for practices to do what they want to do and grow. That happens to be a good spot.”
Demetrops purchased the 8.5-acre site from Cousins Properties. It’s the first major deal since Demetrops founded the company in 2009 as a successor to The Griffin Company. He said MidCity is offering space for lease or sale.
Demetrops said offering up some of the space to potential buyers has generated interest. MidCity plans to offer custom buildings inside and out.
“For any company looking on a five- to 15-year horizon, it makes a lot financial sense as well to do the deal,” Demetrops said.
He said the project is similar to another Barfield Road property MidCity redeveloped for the international headquarters of JAS Worldwide, a global freight company.
“Everything is new except the steel and slab,” Demetrops said.
MidCity in January sold contiguous property to Northside Hospital and Laureate Medical Group for the development of a 46,000-square-foot medical building.
The Sandy Springs/Perimeter Chamber of Commerce is looking for ways to turn Pill Hill into the “Silicon Valley” of medicine. Chairman Rusty Paul said the plans are taking a big-picture view and aren’t delving into the minutia of what nearby office spaces might be available. He said the goal is to take stock of all the assets, catalog them and use them to leverage companies that might be interested in bio-technology, and research and development.
“It may ultimately be one of the assets we catalog,” Paul said.
As the federal Patient Protection and Affordable Care Act takes effect, the demand is likely to increase he said. Republican presidential candidate Mitt Romney has pledged to repeal the law if he defeats President Barack Obama on Nov. 6. Perman said regardless, there will be some kind of health care reform that brings more patients through the doors.
“It’s a huge driver in our industry,” Perman said.