On Monday, Texas Children’s finalized the purchase of the Baylor Clinic building at 6620 Main St. and the O’Quinn Medical Tower at 6624 Fannin St. The buildings were acquired from Baylor St. Luke’s Medical Center and will now be called the 6624 Fannin Medical Tower and the Baylor Medical Clinic at 6620 Main St.
“As we anticipate the future demands of our patient population and the community, finding additional space is critical,” said Texas Children’s President and CEO Mark A. Wallace. “We are fortunate that two properties in the Texas Medical Center, in such close proximity to our existing facilities, became available.”
Wallace added that the purchase of the buildings is not about bricks and mortar but our mission and our ability to better serve more children, women and families who require the unique services of Texas Children’s.
“This is an investment in our mission of advancing patient care, education and research,” Wallace said. “It’s all about investing in people: our medical staff, our employees and especially in our patients and their families.”
Initially, Texas Children’s will lease back a portion of each building to its current tenants until CHI St. Luke’s Health and Baylor College of Medicine relocate to Baylor St. Luke’s Medical Center’s 27.5-acre McNair Campus. Texas Children’s Director of Real Estate Services David Perryman will provide oversight of third-party property management firm Jones Lang LaSalle (JLL) to operate the buildings until the leases expire and tenants relocate.
Meanwhile, a facilities master planning initiative is underway to integrate these two properties into Texas Children’s overall expansion and growth plans for pediatric and women’s services. Texas Children’s does not intend to actively market or lease existing or future vacancies.
“The purchase of these two buildings will help us connect our services even more so than they already are,” said Jill Pearsall, assistant vice president of Facility Planning and Development. “It also will offer a tremendous amount of support to our staff and physicians, and it will ultimately improve not only patient care but the quality of our patients’ experience when they seek our services.”
The Baylor Clinic Building was built in 2003, has 15 stories – 10 of which are parking – and comprises 227,670 square feet of rentable area. The O’Quinn Medical Tower was built in 1991, has 27 stories – six of which are parking – and provides 445,725 square feet of office and clinical space.
Executive Vice President and Chief Financial Officer Weldon Gage said Texas Children’s purchased the properties with money from the organization’s cash reserves, which are set aside specifically for capital expenditures and are separate from the hospital’s operating budget.
“This purchase is a perfect example of why we need to have significant cash on hand,” Gage said. “In doing so, we are able to take advantage of opportunities such as these that will further our mission.”
Below are additional details about the purchase, the buildings and how they will be used.
What is the short-term plan for both locations?
We will continue to lease space to the current tenants. Our facilities master planning also will help determine how these two properties can be used to support our overall growth of pediatric and women’s services.
Who will manage the leases?
Texas Children’s Director of Real Estate Services David Perryman will provide oversight of a third-party property management firm, JLL, to operate these buildings.
How long will we lease the space to the current tenants?
We will honor the leases of current tenants and determine future plans as part of our facilities master planning. We do not intend to actively market or lease existing or future vacancies.
Did we know these buildings would be available prior to beginning construction on Pediatric Tower E?
No, we did not. However, we are fortunate that two properties so close to our existing facilities became available, as they will help us address the growth of pediatric and women’s services we anticipate in the future.
What will backfill the relocated locations?
Our facilities master planning is underway to determine how these two properties will help us meet our overall growth of pediatric and women’s services. As this plan is finalized, we will be determining how vacated areas will be backfilled.
Will the buildings be renamed?
Eventually the buildings will be renamed, subject to any naming rights or restrictions transferred with the sale. We also want to be respectful of existing tenants and their patients who know the buildings by their current names. That is why the buildings initially will be called the 6624 Fannin Medical Tower and the 6620 Baylor Medical Clinic.
Are any improvements planned for the building?
We are developing short-term and long-term capital plans to help ensure an efficient, reliable and comfortable environment for our employees, tenants and the public.