Healthpeak Properties, a real estate investment trust that owns and develops properties in the life science, medical office and retirement sectors will develop in McKinney.
According to a filing with the Texas Department of License and Regulation (via The Real Deal), the upcoming addition to the firm's Metroplex portfolio will be a medical office building spanning 125,000 square feet and comprising five stories. The construction will take place at 4510 Medical Center Drive on the Medical City campus in McKinney.
Medical City McKinney is a 900-physician, Level II trauma center and 285-bed acute care hospital, serving as the primary inpatient behavioral health provider in Collin County.
The project is slated to commence in September and conclude in 2025, with an estimated construction cost of $31 million.
Although several undeveloped plots are accessible adjacent to the extensive campus of the hospital, the precise location was not immediately apparent. While it was reported that the typical rental rate for medical office buildings in Collin County is roughly $25 per square foot, no leasing figures have been made available yet.
According to The Real Deal, the surge in population, aging residents and the growing popularity of telemedicine services are driving the healthcare real estate boom in North Texas. Although the medical office market typically has a smaller earning potential, the report highlights that it is a more stable and secure investment than the regular office market.
While the net absorption of office spaces showed a decline across all major metropolitan areas in Texas since the start of 2023, the medical office sector maintained a positive net absorption rate. JLL reports that DFW had a net absorption rate of 163,000 square feet for medical offices at the beginning of the year.
The vacancy rates for office spaces in DFW are approaching 20%, while medical offices have a vacancy rate of approximately 13%. With over 56 million square feet of medical office space in the region, DFW boasts the highest inventory of medical office space in the state. Over 1 million square feet of medical office space is currently under construction in the region in 2023.