Steindler Orthopedic sells Iowa City office for $11 million

IOWA CITY — Seven weeks after the state approved construction of a new $19.2 million Steindler North Liberty Ambulatory Surgery Center, the affiliated Steindler Orthopedic Clinic sold its Iowa City home base for $11 million.

Steindler Orthopedic plans to stay in its 33,843-square-foot medical office at 2751 Northgate Dr. in Iowa City until it can move into a new 55,000-square-foot clinic in 2024.

The clinic will be adjacent to its new 35,880-square-foot ambulatory surgery center near the booming Interstate 380 and Forevergreen Road corridor.

“Our Northgate location in Iowa City has performed exceptionally well over the past 22 years, but we simply outgrew it,” Steindler Orthopedic President and CEO Patrick Magallanes said in a statement about the April 25 sale.

The Northgate medical office building has housed Steindler since it was built in 2001, and the property’s most recent valuation in 2021 was $6.7 million, according to the Johnson County Assessor’s Office.

University of Iowa Health Care is building a $395 million hospital and clinic/research space along Forevergreen Road, too.

Steindler in 2021 announced it bought 36 acres east of I-380’s interchange with Forevergreen Road, on which it planned to develop a medical park. A five-member State Health Facilities Council in March granted a “certificate of need” required to build the ambulatory surgery center.

“We were unable to expand at Northgate, and when we secured 36 acres right off Interstate 380, we started dreaming about exciting possibilities, including a full medical park development,” according to Magallanes. “Our team was able to source an aggressive buyer for our current building that understood local market dynamics.”

They “crafted an opportunity for us to sell our building and remain in it until our new clinic and the new ASC (ambulatory surgery center) is ready in late 2024.”

The buyer — Crown MedRealty Partners, of Kansas City, Mo. — represents a mix of limited liability companies, including several from Iowa.

Magallanes reported Steindler recently opened the design process for its North Liberty property.

“We are also discussing a new hotel, a new medical office building for private practice physicians, a new hospital, and other health care-related entities with potential partners,” Magallanes said. “Additionally, we are talking to other physician groups interested in participating in the medical park, including groups that will help anchor a new hospital.”

Steindler in February unveiled a new formal partnership with Mercy Iowa City to collaborate on developing the new North Liberty medical park.

Although the two entities will remain financially independent, the partnership “includes enhanced care coordination and shared management responsibility of the orthopedic service line at Mercy Iowa City, plans to collaborate on a medical park in North Liberty, and improved access to high-quality orthopedic care in Eastern Iowa,” according to a February news release.

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