It seemed like an impossible assignment. A client called the Stockton, CA healthcare real estate team at Colliers International just a couple of weeks before Christmas 2017, needing to find and lease space on a very short deadline in a tight market that wasn’t even part of that team’s territory. The client needed space in Pasadena, CA, more than 300 miles down the coast.
But the Colliers team of Erica Frey, Bill Swettenham and Eric Ortiz in Stockton accepted the assignment from WelbeHealth without hesitation. Colliers not only took the call on December 8, but by December 14 had traveled to and toured a promising facility in Pasadena. Then, by December 31, the parties had agreed to a high-level term sheet for the space. That speedy response enabled the client to meet a state-imposed deadline to obtain its licensing for an exclusive territory, and a lease was fully executed by mid-April 2018.
Founded by a group of physician entrepreneurs in 2015, Menlo Park, CA-based WelbeHealth LLC, is a healthcare services company delivering coordinated and value-based care to medically frail seniors. The vision of the Silicon Valley-based, venture capital-funded startup “is a world where every human being participates in our culture through their final days. To make this vision a reality, we provide integrated medical and social services to our most vulnerable seniors, helping to unlock their full potential.”
Through the PACE (Program of All-Inclusive Care for the Elderly) concept, the mission of WelbeHealth is to provide comprehensive primary care and social services on an outpatient basis to vulnerable seniors. It is open to anyone who is 55 years old or older, but is especially geared toward the 80-plus-year-old age group, which tends to be the most frail population. The goal of PACE facilities is to provide an outpatient daytime alternative to a nursing home or hospice.
A tall order at an “impossible” time
Colliers had previously assisted WellbeHealth by arranging a ground-up, build-to-suit lease on its behalf for its flagship PACE location in Stockton. Stockton was the largest city without a PACE facility, so WelbeHeath and Sutter Health partnered to develop the project. Ground was broken for that facility in October 2017 and it opened on Janunary 2, 2019.
Meanwhile, to establish a presence in Pasadena, WelbeHealth sought to lease 12,000 to 17,000 contiguous square feet of medical office space in a very tight market. Two additional things on its wish list were the ability to create a dedicated drop-off area and provide parking in close proximity—a very tall order for whoever chose to accept this mission with its seemingly “impossible” time frame.
“WelbeHealth had previously worked with an out-of-state broker to search for properties in Pasadena,” explains Colliers’ Erica Frey, associate vice president, office properties. “But that broker was unable to turn over prospects that fit the parking requirements of the tenant.” That’s why WelbeHealth reached out to Colliers’ Stockton healthcare real estate experts.
“The ideal location they wanted for the PACE program would provide all-inclusive care for the elderly and the needy,” Ms. Frey continues. “And these aren’t overnight stays. They wanted a large floor plate that was easily accessible, as a lot of patients would be coming in via wheelchair for their primary care. This much square footage with proximal parking—that just doesn’t exist in the Pasadena market. And on top of it, we had a 40-hour deadline, right at Christmastime.”
A speedy response with strategies that worked, including “white glove service”
With little time to spare, the Colliers Stockton team got to work, even though the Pasadena target location was more than 300 miles away, well beyond its Central California territory.
“We searched outside of what was being marketed as available. We paid attention to what could create an opportunity from a space that would otherwise be very unleasable to other tenants,” Ms. Frey explains.
The team flew down to Southern California and met a variety of representatives from the client, including one who flew up from San Diego.
“We are definitely a team that goes above and beyond. We provided door-to-door, white glove service in the middle of this very speedy transaction,” Ms. Frey recalls.
Colliers was able to secure a 10-year lease of the Cotton Medical Office Building, a 14,191-square-foot multitenant medical office building (MOB) with an adjacent parking garage at 50 Allesandro Place in Pasadena.
“We were in a dense area, very hard to park. We originally signed something on a lower level to accommodate the need but ended up having to take some space on the first floor as well, because of the state’s earthquake licensing restrictions. Therein was another challenge once we had already negotiated the deal,” Ms. Frey explains.
“But Colliers procured the opportunity and was able to arrange the transaction in record time,” she says. “We found an off-market option that was able to fit the needs of the tenant.”
The Colliers Difference
What made Colliers stand apart in the Pasadena transaction? Several things, Ms. Frey says.
The team was able to pull together and think outside the box—and outside of its geographic market—to devise some creative solutions with laser-focused attention to detail to win a slim-to-none bet. It also proved to a fairly new client its dedication and its readiness to go above and beyond to help that client meet its goals.
”The engagement is exceptional because this was the second transaction Colliers completed on behalf of WelbeHealth LLC, and this was out of our market in Pasadena, CA,” Ms. Frey recounts. “It proved to the client that we can provide a concierge service that is seamless across all markets.”
She concludes, “Our engagement with WelbeHealth has led to five other transactions with them, some in California and some not. Making it possible for a mission-based company to provide the best care possible to the most frail population base in our society is very important to Colliers. Our senior population is growing and it’s definitely needed.”