Laser Spine Institute Shutdown Leaves Its Headquarters Landlord With $24 Million Loss
Surgery Centers’ Closing Means Vacant Space Across Seven Locations
BY MARK HESCHMEYER (via CoStar)
Laser Spine Institute plans to end operations at its headquarters at 5332 Avion Park Drive in Tampa, Florida’s, Westshore submarket. Photo: CoStar
Laser Spine Institute, a nationwide chain of spinal surgical centers, has abruptly shut down operations, leaving landlords in a lurch.
Highwoods Properties is taking the biggest hit from the closings late last week. The real estate investment trust, based in Raleigh, North Carolina, announced it will have to write off $24 million of accounts and notes receivable, lease incentives and straight-line rents receivable.
Laser Spine leases its 176,088-square-foot headquarters at Highwoods’ 5332 Avion Park Drive in Tampa, Florida’s, Westshore area. It is the sole tenant in the building.
“This is obviously disappointing to us and others affected by this sudden closure,” said Ed Fritsch, chief executive of Highwoods. “Looking forward, the building is well located at Avion Park in the heart of Westshore next to Tampa International Airport.”
Laser Spine’s closing will boost the Westshore area office vacancy total by about 10 percent, according to CoStar data. The Westshore vacancy rate has been rising in the past year from about 8.4 percent to 10.1 percent.
Highwoods’ 3.6 million-square-foot Tampa portfolio was 95.3 percent occupied at year end.
Laser Spine’s decision also means the closing of three other surgical centers:
- 644 Eden Park Drive in Cincinnati, where it occupies 36,000 square feet;
- 450 N. New Ballas Road in Creve Coeur, Missouri, 27,921 square feet;
- 8888 E. Raintree Drive in Scottsdale, Arizona, 25,400 square feet.
In the past six months, Laser Spine had closed three other centers:
- 300 Allen Bradley Drive in Mayfield Heights, Ohio, 36,000 square feet;
- 656-676 E. Swedesford Road in Wayne, Pennsylvania, 26,568 square feet;
- 4727 Gaillardia Parkway in Oklahoma City, 12,542 square feet.
Despite significant cost saving activities from the closings that dramatically reduced its operating costs, Laser Spine said it had been unable to achieve a financially sustainable path forward.
The company said it had achieved an operational turnaround. However, it was unable to attract the necessary financing to undertake a Chapter 11 process and continue operations.