Kennewick medical office complex gets makeover

A medical office complex in downtown Kennewick is getting a makeover to appeal to tenants who do not need a hospital across the street.

The Kennewick Medical and Dental Center faces the former Kennewick General Hospital across Auburn Street and provided office space for hospital-adjacent businesses such as doctor and dentist offices, a laboratory and a pharmacy.

The old hospital is now owned by Trios, in turn owned by LifePoint, and is emptying out. Most hospital functions moved to the new Trios Southridge Hospital in western Kennewick. The Trios Women’s and Children’s Hospital, chiefly a birthing center, soon will leave too.

Trios will consolidate the women’s and children’s functions at Southridge in 2022, when the $21 million first phase of its birthing center addition is set for completion.

The old hospital is a candidate to house, a behavioral and addiction recovery center, but the office complex is not counting on it to generate demand for space.

It is proceeding as if the hospital remains dark, said David Fritch, the commercial broker with Tri-Cities Holdings LLC, who is helping reposition the collection of brick buildings for a new, if uncertain, future.

The effort got a hand from the city of Kennewick, which connected Auburn to 10th Avenue in May after Trios Health donated the land for public use. Auburn previously dead ended in front of the hospital and medical offices. The now-open intersection adds drive-by traffic to the street.

The property is being rebranded as the Auburn Center and features 21 office suites in six buildings in the 800 and 900 blocks of South Auburn Street. It was built in phases between 1955 and 1980, with the final two-story buildings opening last.

The buildings were sold as condos with a shared a parking lot.

The ownership group shrank over time as doctors and other medical providers retired and sold their real estate.

By the time Dr. Raymond Sjerven retired in 2019, only four businesses remained in the center, including an outpost of the Tri-Cities Laboratory network. The property suffered from a lack of visibility and an informal ownership group.

The makeover includes formalizing the condominium association and a special assessment fund repairs and a new black-and-white color scheme to unify the look of the property.

Fritch signed on first as a broker and then an investor after he worked to move from there to western Kennewick. He saw “a tenant for lease by owner” signs in the Auburn complex.

There was little interest at first, he said. The pandemic brought office leasing to a standstill in early 2020.

But Fritch together with investors Dave Richards, Anderson Lizarazo and Franco Vallejos saw an opportunity to bring low-cost office space to a busy corner of eastern Kennewick. They bought into the property as both individual investors and as a group.

“There’s nothing on the market at this price point,” he said.

Tenants started signing on – a tax preparation business, a nutrition business, a fitness studio. He anticipates a mix of retail and professional tenants with a health care-related bent. He hopes to lease the 821 building, formerly Cork’s, as a pharmacy, noting that the closest pharmacies are on Highway 395.

A 3,000-square-foot suite is listed on LoopNet, a public-facing listing site for commercial real estate, with an asking rent of $4.80 per square foot per year, or $14,400.

While the hospital’s future is cloudy, the neighborhood has much to recommend it.

Red Apple Market, Burger King, a gas station and medical buildings occupy all four corners at 10th and Washington Street to the east. Kennewick High School to the west is getting a major makeover and residential developers have been active in the neighborhood as well.

Fritch prefers rescuing existing properties to developing new ones.

“I really like redevelopment,” he said.

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