Hillcroft Medical Center is a 40,730 sq. ft., off-campus medical office building located in the fast growing Houston suburb of Sugar Land, TX and ideally situated within 1.5 miles of three regional hospitals. The property was built in 2007 and is currently 100% leased with a 9.5 year weighted average lease term.
When evaluating medial office opportunities it is important to get access to a market with strong demographic and growth fundamentals, close proximity to hospitals and regional health care systems, building specifications that meet medical office demand, and a lease structure that supports the Fund’s defensive cash flow. Hillcroft does an excellent job of meeting this criteria.
Approximately 92.5% of the property is leased to Hillcroft Medical Clinic Association (HMCA), a large multispecialty practice comprised of 32 physicians covering 16 specialties. HMCA was established in 1948 and generated nearly $44MM of revenue in 2020. The property’s location is convenient to HMCA as many physicians in the practice have admitting privileges to the surrounding hospitals in the area.
Demographics surrounding the property are favorable for medical office uses. Over 1 million people live within a 10-mile radius of the property, of which 114,000 are over 65 years old. This age cohort is expected to increase by 34% by 2026. This growth will continue to bolster the need for healthcare providers. Within a 10-mile radius of Hillcroft Medical Center more than $1.8 billion was spent on healthcare related services in 2019, which supports the strong need for well-equipped, multi-specialty and easily accessible community healthcare facilities.