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Houston Business Journal
Week of January 25-31, 2008

By Jennifer Dawson

Medistar tests medical mall market

Monzer Hourani is working on a medical breakthrough.

The prolific developer wants to create a high-rise medical mall that would cater to Houston's health care hub — the Texas Medical Center. Hourani, CEO of Houston-based Meclistar Corp., has spent decades developing health care-related facilities. Now, he wants to build something unique to Houston's medical community.

Medistar plans to spend between $175 million and $200 million to develop at least a 600,000-square-foot building that would be located just outside of Texas Medical Center boundaries, on Medistar-owned land.

The high-rise would house offices and showrooms for companies that sell equipment, supplies and pharmaceuticals to Texas Medical Center institutions. Tenants could also include organizations working to develop new medical technologies and treatments.

Companies hawking cutting-edge medical equipment — such as MM machines, CAT scan systems and microscopes — could have showrooms in Medistar's building, Hourani says. And TMC physicians, professionals and students could get a first-hand look at the latest technology close to where they work.

Hourani says the future Medistar building could also have a block of space dedicated to biomedical studies to piggyback on the Rice University-led Collaborative Research Center that will be located down the street. The $280 million, multi-institution Collaborative Research Center is under construction at the corner of Main Street and University Boulevard.
Hourani hopes his development will attract more medical research companies to the city and foster more collaboration among institutions.

This idea can help Houston," he says.

The building could serve as a venue for large pharmaceutical companies — such as Bristol-Myers Squibb and Eli Lilly and Co. — to give presentations on new drugs, Hourani says, as well as inform the medical community about the latest advancements.

Medical Center institutions that need extra laboratories or professional offices. Vince Adams. purchasing manager for The University of Texas M.D. Anderson Cancer Center, is not familiar with Mediator's project. but says it sounds promising.

His office processes some 14,000 purchase orders a month from the hundreds of departments within M.D. Anderson. Adams says department heads get information about new products by going to shows and conventions: reading medical journals; and visiting vendor Web sites. As such, Adams says it might be helpful to have the merchandise nearby.

"It sounds like a viable idea that would have some merit." he says. "I think any time someone can see or touch something, it helps them make a decision on what to purchase."

Medistar's project is slated for a. 120,000-square-foot site next to the Holiday Inn on S. Main Street. The site is bounded by Main, Old Main Street, Travis and a vacant lot owned by Baylor College of Medicine that Hourani says is being turned into a surface parking lot.

Half of the Medistar tract is a vacant lot that Medistar bought some years ago from former Houston Rockets star Hakee .m Olajuwon. The other half is at 6700 Main, where the company currently operates a Best Western hotel.

Hourani says site design has just begun, but he would like to build the structure and a parking garage on the vacant lot, without disrupting the Best Western. The hotel site could be used for Phase II of the project in the future, he says.

Hourani may bring in a joint venture partner on the deal. but says more than likely he will develop the project solo. The company is currently designing the building, and intends to have some leases in place before construction begins. Although a marketing effort has not yet begun. Hourani says he intends to break ground in the third quarter of 2008.

The Medistar site, which sits on the outskirts of the Texas Medical Center boundaries, has been the target of other potential developers.

Hourani says he has been approached by several for-profit companies wanting to develop a property there that would compete with the Medical Center, but he refused to sell to them.
"We rejected lots of opportunities." he says. "I love the Medical Center, and I respect it."
That's why Hourani wanted to create something on Main Street that would complement TMC institutions.

The developer cites personal ties to the Medical Center, specifically M.D. Anderson. where he says the lives of two family members were saved.

Hourani also has a professional connection to the Medical Center. He is currently working with the St. Luke's Episcopal Health System, a TMC institution. to develop the 100-bed St. Luke's Sugar Land Hospital and the 176-bed St. Luke's Clear Lake Hospital in Webster.

A prolific medical developer in Houston and across the country, Hourani says he has had a hand in the construction of 620 buildings (see box).

The Lebanon native came to Houston in 1970. a year after graduating from The University of Texas with two degrees — in engineering and architecture.