Southdale Medical Center in Edina nears finish for new addition, giant parking ramp

In age and size, the Southdale Medical Center in Edina is the granddaddy of suburban medical complexes in the Twin Cities.

Over its five decades, the center has grown in stages that reflect the ideas and styles of each era.

Its latest project is a 57,000-square-foot, four-story addition and a parking ramp with nearly 1,200 stalls.

When work is completed in November, the huge office complex across W. 65th Street from Fairview Southdale Hospital will wrap up the latest remodeling aimed at keeping it competitive with changes in patient care as well as the steadily growing demand for medical services in the southwest metro area.

The medical center, at more than 300,000 square feet in size, is also one of the most popular in the metro area with doctors. Owner IRET Properties of Minot, N.D., said the center's vacancy rate was less than 4 percent before the addition.

Its last big update came in 2008, when IRET spent $11 million to construct a 27,750-square-foot addition featuring a soaring winged roof that now serves as the campus' main patient entry point at 6545 France Av. S. That project, aimed at improving its image, function and visibility, also softened the sterile look of the original 1950s building.

Now the real estate trust is wrapping up a $34.7 million investment in the form of a third multitenant building on what was once a surface parking lot and the addition of a giant parking ramp.

The daunting logistics of accomplishing all the new construction within a tight land footprint while also minimizing the disruption to Southdale's patients fell to Paul Reinke, president of Oakdale-based Silver Oak Development. Reinke describes himself as a new breed of "development manager," someone able to take the traditional role of construction manager and elevating it to encompass all the extra people and political skills necessary for health care projects.

"It was an arduous process to get this project approved, and my experience in Edina in helping build the 5000 France condominiums [in 2007] helped give it credibility," he said. "And uniquely with health care projects like this one, it's very important that the person in charge of the construction is available to tackle inconveniences to tenants and patients.

"For instance, the construction process has meant a temporary reduction of parking on site, so we needed to set up a valet parking service and shuttles to access leased spaces at Southdale shopping center. At first there were some problems, and people were upset. I took some abuse for that, but I was also able to quickly fix it quickly with the help of IRET's employees."

The trade-off for all the extra effort is that demand for medical office space in the Edina market is extra high. The addition, known as the Southdale Medical Building Phase III, was built "on spec" but is already finding takers even before it is entirely complete, said Jill Rasmussen of the Davis Group, who is handling the leasing for IRET.

"Medical office owners need to keep competitive in terms of clinic layout, interior design and patient experience, and the owners of the Southdale campus are making the investments necessary to do that," she said.

Fertility Lab Sciences, a Colorado-based fertility clinic, took most of the fourth floor, opening in July, while signed letters-of-intent are out for two of the other floors and proposals are in play for most of the first floor, Rasmussen said.

"We anticipate having most of the building leased up within the next several months, with maybe just a couple medium-to-small-sized suites left over," she said.

Don Jacobson is a freelance writer in St. Paul. He is the former editor of the Minneapolis/St. Paul Real Estate Journal.