Colliers’ persistent efforts assisted with the pre-leasing of a much-needed medical office building in Brea, CA, part of the larger, mixed-use Central Park Village development project.

The site of the Brea Hospital had become an eyesore. The hospital building was torn down in 2006, leaving a vacant lot with partially occupied and outdated medical office buildings (MOBs), and a community devoid of easy access to healthcare services. Now, thanks to the persistent efforts of the developer and Colliers Healthcare Services, the community of Brea will soon have a state-of-the-art medical facility, known as Brea Medical Center, which will provide convenient and comprehensive outpatient healthcare services.

The $100 million Central Park Village Brea mixed-use development and the soon-to-be-open three-story, 38,313-square- foot Brea Medical Center are positive outcomes for the North Orange County, CA suburb. Colliers played a pivotal role in the healthcare component of Central Park Village by providing JH Real Estate Partners, the project’s developer, with not only valuable real estate expertise, but invaluable healthcare real estate expertise.

John Wadsworth, Senior Vice President of Colliers Healthcare Services in nearby Irvine, CA speaks to how Colliers helped the local, privately owned developer during multiple phases of the 12-year, 16-acre campus redevelopment.

“Central Park Village Brea used to be the former Brea Community Hospital campus,” Mr. Wadsworth says. “The hospital had been a physician-owned enterprise that fell on hard financial times, finally closing in 2005.”

JH Real Estate Partners (JH) came in soon thereafter and acquired the entire campus with plans to tear down the hospital, keep the adjacent existing three MOBs and eventually replace them with — and relocate existing tenants into — the new Brea Medical Center.

Colliers’ Irvine office first got involved with JH on the project in 2006, advising on leasing the legacy MOBs and assisting with pre-leasing of the to-be-developed Brea Medical Center.

‘An Underserved Market’

Brea, a middle/working-class area in an older section of North Orange County, was a strategic location for both the residential component of the project and the new medical center.

“It’s an underserved market surrounded by a well-insured, middle-class population,” Mr. Wadsworth explains. “When Brea Hospital closed, it was a blow to the community. Local access to care was impacted. There is a good portion of the population that is over age 55 that are still looking for convenient access to care. We told the developer, you have a great opportunity to include healthcare services alongside a new residential and mixed-use community.”

As far as the healthcare facilities on the property went, JH wanted to keep the three existing MOBs operating and tenants in place as long as possible, and eventually shift them over to the new Brea Medical Center.

“Then the recession hit,” Mr. Wadsworth recounts. “By the time JH was ready to break ground on the medical center, with the hospital gone and the economy stalled, a lot of those tenants in the old MOBs left.”

But JH stayed the course. In 2012, as the economy was mending, JH submitted a revised plan that was eventually approved by the Brea City Council. The plan called for up to 452 residential units, 66,000 square feet of commercial space including 35,000 square feet for medical offices, and the centerpiece of the project: a 1-acre “central park.” The residential side of the project broke ground shortly thereafter.

Economic Rebound

Finally, in 2017, with the economy recovered, the construction of the new medical center was resuscitated. Only a handful of the original tenants were left in the three legacy MOBs. But one of them was CareMore, a Southern California integrated health plan and care delivery system for Medicare and Medicaid patients, now owned by Anthem. CareMore was highly interested in leasing space in the new MOB, and its share of the new building would amount to about 40%.

“CareMore was the impetus for the project to move forward. The developer knew they had a strong anchor tenant. With CareMore in tow, Colliers went to market and JH broke ground mid-2017,” recalls Mr. Wadsworth. The medical office building actually increased in square footage from the original 35,000 square feet to 38,313 square feet due to CareMore’s space planning requirement.

To further assist, Colliers recommended potential architects for the project, with JH eventually selecting MSA Architects for interior shell design and the majority of the tenant improvement work.

With CareMore taking one and a half of the three floors, the Colliers team set about pre-leasing the remainder of the building. Other confirmed tenants include United Medical Imaging, a regional diagnostic imaging group, and First California Physician Partners, a nonprofit medical foundation affiliated with Tenet California and connected to Placentia-Linda Hospital just a few miles to the south. Rounding out the 87% pre-leased building are an ophthalmologist and a dermatologist.

As far as the remaining 13% of the building, there are two small suites left, and Mr. Wadsworth says there is expressed interest in those as well.

“When you build an MOB and you can be patient with landing the right mix of tenants from day one, it will be a lot better experience going forward. And when you execute the right mix, you can put the thing to bed for the foreseeable future and focus on collecting rent,” Mr. Wadsworth says.

Brea Medical Center is on schedule to open in the fourth quarter of 2018. Tenant improvements for the first occupants are well underway. The three old MOBs will be torn down immediately after the last tenants vacate and will be replaced by additional residential, parking and possibly support retail

The Colliers Difference

What makes Colliers stand out? JH knows they made the right choice in a partner to help see them through the Brea Medical Center project because of Colliers’ willingness to do whatever it takes to assist in the accomplishment of the client’s goals.

“JH Real Estate Partners has enjoyed a long-term relationship with the Colliers Irvine team, who has stood by us every step of the way performing a multitude of services well beyond traditional marketing and leasing,” Mr. Ernie Rivas of JH Real Estate Partners, remarks. “There were a lot of front-end discussions through the years, including the uncertain twists and turns of the recession. Colliers referred and recommended architects for the interior shell design and the interior tenant improvements. They helped us right-size the medical building based on market influencers to the current version, which complements the balance of the mixed-use development.

“Colliers is not just about leasing, they’ve consistently gone above and beyond to meet our needs and help us achieve an excellent result with Brea Medical Center. We know Brea Medical Center and the greater Central Park Village development will be a much-appreciated asset in this community.”

Mr. Wadsworth concludes, “This project is a testament to persistence, timing and a well thought out repurpose project taking into account the needs of a community — truly a great outcome for all involved.”