Steamboat Springs Local dentist Ted Schrock and business partner Mark Helm, an opthalmologist, never pictured themselves as developers. But they're preparing to move into new offices in a building close to Fish Creek, which they built with their general contractor and third partner, Amaron-Folkestad.
Ironically, Schrock and Helm might never have developed their new building if they'd had a chance to purchase office condominium space in the medical office building on the campus of Yampa Valley Medical Center. Since they broke ground on the new building, the hospital office building has switched tracks and has been selling office condominiums to medical professionals.
Originally, the Steamboat Springs Health Care Association declined to sell office suites, preferring to rent to local medical professionals, Schrock said. He and Helm felt that if they had the opportunity to buy, they could pay off their debt within 10 to 15 years, putting themselves in an equity position. So they chased land less than two miles away from the hospital and started working through the development process.
Medora Fralick, who is managing the medical office building for the hospital, acknowledged that at one time, local medical professionals were wary of the new building, but she said she thinks that situation has reversed itself. The building is almost full, both with renters and with professionals who have purchased their space.
"Initially there was suspicion on both sides," Fralick said. "But I think people are really starting to realize the hospital is not out to make a fortune on this."
Fralick is the principal of a management company called Commercial Property Group LLC.
The hospital itself has recently decided to pick up an option to occupy some of the remaining space in the office building. That means that of the original 43,000 net leasable square feet, 8,000 square feet remains.
The hospital will use between 5,000 and 6,000 square feet to house a new outpatient clinic devoted to pain management, Fralick said.
Tenants have the option of renting for $21 per square foot plus common area fees of $6.50 per square foot, Fralick said. Or, they purchase the space as "core and shell" with the basic mechanical and electrical hookups in place for $165 per square foot. The leases are available for 10 years at a fixed rate, with no increases geared to the consumer price index, Fralick said.
Schrock pointed out that his new building is not limited to professionals in the medical field. He's had inquiries from lawyers, accountants and other businesses that want to own their own offices.