Land near SeaWorld scooped up for more than $1 million an acre for future acute care hospital

The under-construction 116,000-square-foot Upshot Medical Center at Mills Park landed a major tenant this summer when Louisville-based ScionHealth announced it would be moving a 64-bed long-term acute care hospital into one of the two towers on the campus.

Turns out, this won’t be the only hospital of that type in the Orlando area that Upshot Capital Advisors is providing space for.

The local developer and owner of health-related assets purchased a sliver of property a short drive from SeaWorld and the Orange County Convention Center in the heart of Orlando’s tourism district this week for more than $1 million per acre.

With the $7.5 million acquisition of the 5.5-acre parcel at 9278 Turkey Lake Rd, the company is planning to build a standalone long-term acute care hospital, according to Orange County records.

Juan Carlos Gomez, the chief operating officer with Upshot, declined to say which healthcare provider would be taking over the building once the project is complete.

Susan Feeny, the division vice president of communications with ScionHealth, said she’s not aware of any immediate plans by the company to open another acute care hospital in this market.

“We are looking, but we don’t have anything else definitive in the Orlando market right now,” she said.

While a little surprised the land wasn’t purchased with multifamily housing in mind — a hotel next door is slated to be converted into an apartment complex — Anne Spencer, a healthcare specialist with Cushman & Wakefield, said she’s not at all astonished by the closing price.

“It’s a very prime area; that’s expensive real estate,” she said. “It has got lots of visibility and a high traffic count and a high payor mix, meaning the majority of the population in that part of town is privately insured.”

With Orlando Health’s Dr. Phillips Hospital located to the south, there is a flurry of healthcare development activity happening nearby. Sand Lake Surgery Center, located at 7477 Sand Lake Commons Blvd, is considering buying adjacent property to build a two-story, 30,000-square-foot medical office.

Spencer said Indiana-based Holladay Properties recently purchased a former psychiatric hospital at 7450 Sand Lake Commons Boulevard with plans to convert it into a multi-tenant medical office complex.

The area is “becoming a medical corridor,” Spencer added.

“These (assets) aren’t going to compete with Dr. Phillips hospital, they will actually benefit from the hospital,” she said. “There’s a synergy here. It’s a good thing.”

For the planned acute care hospital on Turkey Lake Road, Gomez said the property was acquired through Upshot’s second opportunistic real estate fund, which is primarily focused on purchasing and developing healthcare-related assets. He declined to provide additional details.

On Sept. 16 — a month before closing on the land — Gomez lodged a request to Orange County asking if the property’s zoning allowed for a Long Term Acute Care Hospital (LTACH) in the Turkey Lake Plaza PD.

He said that the hospital type is similar to a skilled nursing facility in that it’s designed for patients with medical conditions that require specialized treatment for an extended period of time, typically at least 25 days, and offers individualized and resource-intensive care on an inpatient basis.

He said in the letter to the county that while traditional hospitals offer a number of outpatient services such as emergency care, maternity care, outpatient radiology and more, the treatments and procedures available within an LTACH are meant only for patients residing and being cared for in the facility.

The use is allowed on the property, according to a letter written by Jennifer Moreau, the manager of the county’s zoning division.

“The Turkey Lake Pd land use plan allows uses permitted in the C-1 zoning district, including the following: timeshare, hotel, condo hotel, retail and office,” she wrote in an Oct. 17 response to Upshot leaders. “I have determined that as the PD allows C-1 uses, the proposed LTACH use would be permitted within the Turkey Lake Plaza PD.”

Florida is experiencing a rapid expansion of specialty and acute care hospitals because of its population growth combined with the state policy eliminating the requirement for certificates of need for new hospitals. That move was signed into law by Gov. Ron DeSantis in 2019.

“Once that (CON program) went away, we are seeing more specialty hospitals come in,” Spencer said. “We have definitely seen an influx.”

In Altamonte Springs, WB Development Partners is partnering with New Era Companies to deliver a 60-bed, three-story rehabilitation hospital spanning 63,125 square feet to the northeast corner of Gateway Drive and Maitland Boulevard. The Orlando Rehabilitation Hospital, as it will be called, is expected to open in 2023 and will be operated by

Two more rehabilitation hospitals are coming to Lake County. Catalyst Healthcare Real Estate is building a 50,000-square-foot rehabilitation hospital in the Lakeview Center medical office park on Mayo Drive, just south of U.S. 441 and near the AdventHealth Waterman campus.

[ Earlier coverage: Catalyst Healthcare to build rehab hospital across from AdventHealth Waterman campus ]

Meanwhile, Encompass Health is building a 100-bed rehabilitation hospital on S.R. 50. as part of its Florida expansion.

ScionHealth announced in a July news release that it had signed on to lease space in the Upshot Medical Center at Mills Park for a long-term acute care hospital that’s expected to begin operations in the first quarter of 2024.

Upon completion, ScionHealth’s 85,500-square-foot LTACH facility will include six floors with approximately 36 long-term acute care beds and an acute rehabilitation unit with approximately 28 beds.

While ScionHealth currently operates ten specialty hospitals across Florida under the Kindred Hospitals brand, this would be the company’s first facility in Orlando.

“We are excited to establish a presence in one of the fastest-growing markets in the nation, and eager to leverage our expertise in caring for the most medically complex patients to benefit the residents of Orlando and the surrounding community,” Rob Jay, chief executive officer of ScionHealth, said in the news release. “We are proud to become an anchor tenant in the centrally located, accessible, state-of-the-art Upshot Medical Center at Mills Park.”

ScionHealth operates 79 hospital campuses in 25 states – 61 long-term acute care hospitals and 18 community hospital campuses and associated health systems.

Have a tip about Central Florida development? Contact me at (407)-800-1161 or dwyatt@GrowthSpotter.com, or tweet me at @DustinWyattGS. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.