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VOL. 118 | NO. 136 | Thursday, July 29, 2004

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Weston notes

Briarcrest Office Project Gets Under Way

Weston Cos. responds to demand for medical office space


The Daily News

David Peck, president and chief executive officer of Weston Cos., said the commercial real estate firm may have found itself a new niche. Officials with the company, which has a large number of office developments in East Memphis, are making plans to build three new medical office buildings in Memphis in less than a year, one in East Memphis and two in Germantown.

Its a new focus for us, though I dont think its been an intentional thing, Peck said.

Capitalizing on demand. However, he said the company is definitely capitalizing on the demand for medical office space around the Wolf River and Germantown area, as well as Class A office space along the Poplar corridor. The most recent medical office project completed by Weston is the Wolf River Medical Building at the corner of Riverdale Road and Wolf River Boulevard.

Newest development. This week, Peck said Weston officials are finishing site work and will pour the foundation for the Briarcrest Professional Building, a new medical office development at Briarcrest Avenue and Quail Hollow Road, one block north of Poplar Avenue. Weston officials also will close soon on land at the site of the former Wal-Mart store in Germantown, which Peck said the company is planning to use for two medical office buildings.

Well be starting work on those around the end of the year or the first of 2005, he said.

A building permit for the property at 6286 Briarcrest was issued July 21 for $3.5 million, according to The Daily News Public Records Database, www.memphisdailynews.com.

Major tenant. Peck said cost for the Briarcrest Professional Building is estimated at $11.5 million, and the building is about 70 percent pre-leased. It is scheduled to be ready for its first tenant, OrthoMemphis formerly The Orthopaedic Clinic by Aug. 1, 2005.

General contractor on the project is Linkous Construction, and architect is Weston Design Inc. Weston Management Co. will manage the property.

The three-story, Class A medical office building will contain about 60,500 square feet. Weston, which has owned the land for about five years, bought the property on Briarcrest for general office use, but Peck said he believes the market wouldnt support that type of development.

Consolidation. OrthoMemphis, the buildings major tenant, is expected to occupy up to two-thirds of the building, including most of the first floor. Ken Beasley, president and chief executive officer of Healthcare Network LLC, which manages OrthoMemphis, said company officials decided to merge three of the companys offices and believed an East Memphis location would best serve its patients.

Beasley said the decision to merge the offices was based on a variety of factors, one of the most important the realization that we were in a situation in one office building where we were basically going to end up with no tenants.

At the other location, the rental rate was continually increasing every year, so our operating expenses there were getting rather large, he said. Plus, theres just a lot of sharing of resources our major offices can do to help reduce our internal operating costs.

Prime location. Beasley said company officials did an extensive analysis of OrthoMemphis current and potential patient populations and quickly targeted the East Memphis location.

OrthoMemphis currently has offices on Cresthaven, Ridgeway and Exeter roads, as well as a presence in hospitals including Baptist Memorial Hospital, St. Francis Hospital and Methodist Hospital-Germantown. In the future, Beasley said, the company might revisit the idea of operating smaller satellite offices throughout the area.

Our patients arent like regular primary care patients, Beasley said. People get referred to us for a definite period of time, and they typically dont see us on an ongoing basis.

Primary office market. Though development of the Briarcrest Professional Building reflects a new focus on the medical office market for Weston, the location in East Memphis is an area the company has long targeted for development. Peck said the Poplar corridor has always been home to the primary office market in Memphis, and thats what our focus has been since weve been in the city.

Other Weston properties near the Briarcrest Professional Building site include Renaissance Center, an eight-story, 200,000-square-foot office building located a quarter of a mile east of the development. One block west sits the world headquarters of FDX, the holding company of FedEx, in a 100,000-square-foot, four-story building at the corner of Briarcrest and Shady Grove Road.

Other development. In addition to its other services, Weston has developed close to 3 million square feet of office space since it was established in the 1970s.

Were also developing a park out by Southwind for the Kemmons Wilson Co., Peck said. It will have four buildings and a total of about 400,000 square feet.


PROPERTY SALES 50 389 12,758
MORTGAGES 21 248 8,003
BUILDING PERMITS 295 813 29,934
BANKRUPTCIES 35 164 6,064