A group of local physicians paid $3.5 million in late May for city-owned land in Winter Park with plans approved for a new medical office building. They claim a major hospital group is now lined up to lease, and are looking for more land for a second round of development.
The 1.51 acres at 1111 W. Fairbanks Ave., known as the former Bowl America site, lie just east of the intersection with U.S. 17-92 (Orlando Avenue) and south of Comstock Avenue. The city began marketing it for sale in June 2017, and the high bid of $3.5 million was accepted by city commissioners in late September.
Gandhi told GrowthSpotter the development team now has one of the region's three large hospital groups under contract to lease the office building. He declined to name the tenant, citing a non-disclosure agreement, and leasing terms weren't included in the $2.625 million mortgage sourced from SunTrust Bank to close on the land.
The building's orientation will now be parallel to Fairbanks Avenue, and its parking lot shared after hours with the city for visitors of Martin Luther King, Jr. Park.
The project's final updated building elevations go before Winter Park's Planning & Zoning Board on Tuesday for approval, with staff's recommendation.
Gandhi said he and his investment partner in the Verax venture, Dr. Javier Miller, are working on construction plans now for city review. He anticipates a groundbreaking in late third quarter, and estimates an $8 million investment for the land and building shell, along with an estimated $4 million or more for interior buildout, of which his ownership will cover part for the tenant.
Winter Park had the lowest total vacancy rate in the first quarter among submarkets in Greater Orlando for office space (2.9 percent) and the second highest average rental rate ($24.71), according to Cite Partners' latest quarterly office market report.
Gandhi said his first experience as a real estate developer went well, with the hardest part being how unpredictable the votes could be from publicly elected officials over approving his development plan.
"I think now we'll be looking for our next project, maybe in the Altamonte Springs area to do some similar medical office," he said. "We're looking for land for new construction or a value-add building that can be rehabbed. A challenge is finding that can accommodate five parking spaces per 1,000 square feet (of conditioned area)."