by John R. Karman III, Business First Staff Writer
Faulkner Real Estate Corp., which manages and leases a more than 900,000-square-foot medical office portfolio in the Louisville market, has expanded to perform those services in three other cities.
Healthcare Properties, Inc., a publicly traded real estate investment trust based in Long Beach, Calif., selected the Louisville firm to provide leasing and management services for facilities it owns in Lexington, Ky.; Evansville, Ind.;and Dayton, Ohio.
The deal, which Faulkner officials said could lead to additional work and revenue for the Louisville firm, took effect Jan. 1. Terms were not disclosed.
Management portfolio now has 15 buildings in four cities
In Lexington, Faulkner now operates two facilities, 73,569-square-foot Eagle Creek Medical Plaza, according to officials with the Louisville firm.
Faulkner also has begun leasing and managing one building in Evansville, the 74,256-square-foot Deaconess Gateway Hospital medical office building, and one in Dayton, the 71,624-square-foot Wright Medical Building.
The expansion means that Faulkner now is responsible for operating a 15-building, nearly 1.2 million-square-foot medical office portfolio in four cities. That includes 11 buildings in Louisville.
The majority of the local properties are located on Norton Healthcare, Inc. campuses and are owned in partnership between HCP, the California REIT, and Faulkner.
REIT cutting number of management firms
Fred Faulkner, president and CEO of the Louisville firm, said he and HCP officials have been exploring opportunities for expansion for several years.
The REIT was looking to reduce the number of management firms that it does business with nationally, he said and “it was a natural” for Faulkner Real Estate to take over operations in three regional cities because of their proximity to Louisville.
HCP officials could not be reached for comment before Business First’s press deadline.
The REIT, which was founded in 1985, trades on the New York Stock Exchange under the ticker symbol HCP. The company has $14.4 billion in assets under management, according to its web site, www.hcpi.com.
Its portfolio contains 670 properties in 42 states and Mexico. Holdings include medical office buildings, senior housing, hospitals and life-science facilities.
Deal provides foothold for future growth
Faulkner said the expanded relationship with the REIT is important because it provides steady revenue for his company at a difficult time for the commercial real estate industry.
Beyond that, it gives Faulkner Real Estate a foothold to expand in three new markets, he added, and it provides an opportunity to do more work for HCP – possibly including development – as the economy improves.
“We’re hoping that by building relationships in other markets…we’ll be in a position to help both with their campus planing and with future development and growth if they want to add a new product,” he said.
Faulkner Real Estate’s main business traditionally has been developing, leasing and managing office and retail properties, but the firm experienced growth in its medical office portfolio during the recession.
Faulkner said that’s because the health care sector has remained strong during the downturn.
He looks for that segment of the real estate industry to continue to grow as health care providers invest increasingly in clinical space and outsource the management of regular office space to companies with that expertise.
Norton official praises Faulkner’s work
Mike Hendricks, vice president of facilities management for Norton, said the Louisville health care company follows the strategy and, as a result has developed a long and positive relationship with Faulkner Real Estate.
“It’s a difficult job, property management,” he said, adding that Faulkner’s firm does a good job operating the buildings on the Norton campuses.
“That’s a lot of square footage,” he said.