A year after forming a joint venture to pursue health care development, Duke Realty Corp. and Bremner Healthcare Real Estate are preparing to storm the Southeast, one of Duke's stronghold markets, by opening offices in Atlanta and Miami, and by bringing on a new partner.
Announced last December, Duke's and Bremner's joint venture this year locked up $100 million worth of projects, ranging from a medical office building on Michigan Road in Hamilton County to an outpatient hospital in Summit, N.J., near Newark.
In its first year, the joint venture surpassed its initial goal of winning $60 million worth of projects, convincing officials of both companies that Bremner's health care expertise combined with Duke's national reputation for construction and development is a marketable union.
"We're just seeing tremendous opportunities," Duke Chairman and CEO Dennis Oklak said of the joint venture in an Oct. 27 conference call with analysts and investors, when he predicted the companies' health care business could grow $50 million a year. "The biggest challenge for us is making sure we've got enough people to chase and respond to these opportunities right now."
Accordingly, both companies have been adding staff over the past year, with no plans to slow down. Bremner has hired 25 new employees at its Parkwood Crossing headquarters and in field offices, boosting its work force nearly 25 percent, to 110 people. Duke, an 1,100-employee publicly traded real estate investment trust, has added 17 people to focus on health care development through the joint venture.
Ownership and funding for each project is split equally by the two companies, but Duke's nearly $6 billion in assets allow the venture to win projects Bremner might not be able to alone, said President and CEO Jim Bremner.
Several of the projects under way are with health care systems that were already familiar with Bremner. The first project, a 39,000-square-foot medical office building on North Michigan Road more than half occupied by St. Vincent Health physicians and offices, came about because Bremner became the health care system's strategic real estate planner in 2003, said St. Vincent Director of Real Estate Paul Clendenen.
Bremner has recently hired business development managers for the Atlanta and Miami offices and is looking to hire a third focused on points east of Indianapolis, Bremner said.
In November, Bremner tapped St. Vincent Health's chief strategy officer, Deeni Taylor, as a partner and executive vice president. In that position, Bremner is counting on Taylor to leverage 25 years of experience working for hospital systems and health management companies, many in the Southeast.
Health care is proving to be a hot expansion area for other local real estate developers, as well. Locally based Lauth Property Group LLC two years ago launched a formal health care division by hiring W. Todd Jensen from national health care developer Hammes Co.
This year, Lauth's medical division won $125 million worth of contracts in seven states, Jensen said. The division now employs 25 people.
About half of Lauth's health care projects are medical office buildings, such as its recently completed project on North Meridian Street near 126th Street, and outpatient facilities, Jensen said. The other half are long-term, acute-care facilities for national operator Select Medical Corp., based in Pennsylvania.
In the coming year, Lauth's health care pipeline also includes projects for major health systems in Denver; Raleigh, N.C.; Richmond, Va.; and Fort Lauderdale, Fla.