The partnership of Old Dobbin Owner LLC has made early inroads toward its goal of eventually leasing all 250,000 square feet of its office park in Columbia to medical users. (Courtesy Centennial Medical Group)

When the partnership of Old Dobbin Owner LLC, which includes Centennial Medical Group and Baltimore-based Goodier Properties, purchased the 250,000-square-foot, six-building office park last year in Columbia, it had a clear goal.

Given the property’s serene setting despite its location just off the busy intersection at Route 175 and Dobbin Road, the partnership’s idea was to work toward making the property into a medical office park that would offer patients easy access to various medical professionals.  

While that intent will take time to fully realize, the partnership is off to a good start: the park is 100% leased, including 60% of the space by medical tenants.  

Med cluster

Today, what CMG calls its Columbia “medical neighborhood” serves as “one of the area’s only primary care practices that can accept patients starting with preventive care or treat those with various ailments,” said CMG CEO Connor Ferguson. “We do most everything in-house, which is the whole point.

“We offer several providers and are looking for more,” said Ferguson, noting that CMG “is the largest primary care practice in Howard County in terms of number of patients with our tenant Columbia Medical Practice,” reaching “more than 50,000.”

What is presently offered at Old Dobbin Road includes First Call Medical Center for urgent care, which is key because it can receive ambulances with Priority 3 (non-life threatening) cases. That takes pressure off the emergency room at Johns Hopkins Howard County Medical Center.

“We’re the only facility approved to do this by the state of Maryland and Howard County, which is based on protocols under a memorandum of understanding with the Howard County Department of Fire and Rescue Services,” said Ferguson, also noting CMG’s Maple Lawn and Ellicott City locations.

In addition to primary care and urgent care, the CMG also offers physical therapy, allergy testing and treatment, heart labs, sleep labs, a research department and its own point-of-care lab testing for bloodwork, etc., at the park; there are other campus tenants outside the CMG network that offer radiology and orthopedic services.

Today, what CMG calls its Columbia “medical neighborhood” serves as “one of the area’s only primary care practices that can accept patients starting with preventive care or treat those with various ailments,” said CMG CEO Connor Ferguson. (Courtesy Centennial Medical Group)

Distinct needs

What the move also represents is CMG’s heightened penetration into its market, as the Old Dobbin Road location, “takes health care a step forward,” said Medical Director Dr. Steven Geller, “to care for patients according to a like-minded, patient-centered philosophy that benefits patients and the community as a whole.

“By centralizing and coordinating care at this high level,” said Geller, “this health care campus is a one-of-a-kind model in Howard County with a focus on quality and improving access to care.”

From a leasing standpoint, Jon Selfridge, vice president with Goodier, said the partnership’s six current tenants are all “about a year” into 10-year leases; with the remaining 150,000 square feet occupied by traditional office tenants. “As their leases expire between next year and 2030, we’ll look to backfill them with medical users.”

The biggest factor in this approach “is the location,” said Selfridge. “It used to be that all of the medical buildings were around a hospital, but medical practices are expanding out to where their clients are, so being located within office and retail nodes of a community” has become a more frequent occurrence.

But often, attracting the tenants means building out structures that weren’t designed for medical uses. “Having the right ceiling heights to accommodate magnetic resonance imaging equipment, ample power for radiologists and higher levels of filtrations for ambulatory surgery centers” often come into play, he said, as well as redundant power or generators. “It’s a tenant-by-tenant needs assessment.”

And that can be expensive. Larger tenants “may have to pay more than the market’s going rate, such as mid-$30s per foot, which is $10 per foot more than regular tenants,” said Selfridge.

“Look at the new Howard Hughes medical building that’s rising at the Columbia Lakefront,” he said. “It has a great location, a great operator and it’s leasing up,” he said, “though at an even higher rate as compared to our building.”

Selfridge thinks similar deals will continue to arise in the general office market, especially if the projects are located around hospitals or major retail centers may be leased by larger concerns ― such as the Mercy Personal Physician at Lutherville ― that can make a large financial commitment.

“It’ll be a trend, but not as widespread,” he said. “Still, there will be an increased demand and the conversion makes sense, simply because building within an existing park like ours is less expensive than building a new one.”

Building out

As Selfridge noted, there is also room in the market for medical being simply among the uses in a given medical park.

For instance, “Medical tenants like to occupy first-floor space for ease of access,” said Owen Rouse, senior vice president, brokerage, with MacKenzie Commercial Real Estate Services, “and partially because non-medical office tenants don’t necessarily want to get on the elevator with sick people.”

But going that route can be lucrative, too. “There are occasions when you have a multi-story building with medical tenant on the first floor that pays a disproportionately higher lease rate than non-medical tenants on the second floor, with the top floor used as low-rent space, storage or perhaps staying vacant,” said Rouse, “if the medical tenant generates enough income.”

Also, medical tenants have special parking needs, such as ample close-up parking; as well as, the potential need to accept numerous plumbing fixtures or increased slab strength to accommodate larger machines.

As for other types of commercial spaces, “there’s the question of availability. With the retail environment having regained its health, there is much more opportunity for medical users in the office market,” said Rouse, “which in the metropolitan Baltimore market can have vacancy rates higher than 15%.”

Condominiums “can also offer some advantages, but are hard to expand or shrink should the occupying practice shift,” he said. “Office, however, offers more opportunities as time goes on with the growth and needs of clients and the community.

“That’s why,” said Rouse, “as opposed to retail or condo space, it’s easy to envision growth within the office setting.”