Managing healthcare real estate is a complex endeavor that demands a strategic balance of operations, financial objectives, and long-term planning.

In response to these challenges, a significant shift is occurring among major health systems. Increasingly, organizations are adopting a strategic partnership model, leveraging external expertise to optimize operations, reduce costs, and enhance efficiency—all while navigating rising expenses and industry headwinds.

What is the Strategic Partnership Model?

The strategic partnership model in healthcare real estate involves collaborating with a commercial real estate firm like Colliers to manage leases, acquisitions, dispositions, and overall real estate strategy. This approach contrasts with the traditional full-time employee (FTE) model, which relies on an internal team to oversee these functions.

By adopting this model, healthcare organizations can improve economic overhead by reducing internal roles that traditionally incurred salaried expenses, redirecting those savings towards revenue-generating activities. Facilities management often remains an internal function, focusing on the upkeep and operation of owned properties like hospitals and medical centers. In contrast, real estate functions—such as lease transaction management, acquisitions, and dispositions—are more transactional and can be effectively managed by third-party experts.

Understanding these distinctions allows healthcare systems to develop optimized management strategies, delineating leadership roles where necessary, with higher facilities leadership roles remaining in-house. Such partnerships are not new to healthcare; many systems already utilize them for revenue cycle management, IT support, ASC management, lab work, and more. Thus, extending this model to transactional real estate teams is a logical step, serviced through a vendor contract rather than full-time employees.

What Factors Are Driving This Trend?

Several factors contribute to the increasing adoption of the third-party model. Financial constraints, such as rising costs and reduced reimbursements, pressure healthcare systems to seek cost-effective solutions.

There is also a heightened focus on operational efficiency and cost savings, prompting organizations to streamline administrative headcount and reduce reliance on internal teams. Additionally, the demand for enhanced expertise, data, and resources has driven the need for specialized real estate management services.

Benefits and Advantages of the Third-Party Model

One of the primary advantages of the third-party model is the reduced administrative burden, allowing hospitals to streamline real estate management without requiring a full FTE. Another significant benefit is access to industry expertise. Third-party real estate professionals provide deep market knowledge and best practices, leveraging their networks and brokerage teams. This model enables healthcare organizations to acquire high-quality talent at an achievable cost while navigating complex transactions with strategic insight.

Redundancy and scalability are also key advantages. Healthcare systems gain access to a broader pool of resources, such as market intelligence and tools, mitigating risks associated with internal staffing shortages.

Case Study: The Benefits of a Strategic Partnership

One healthcare system’s experience highlights the effectiveness of this model. Through their partnership with Colliers, they effectively oversaw 250 leases, facilitated acquisitions and dispositions, and integrated real estate strategy with key functions, including finance, capital planning, legal, treasury, and project management, ensuring seamless alignment across departments. By leveraging Colliers’ deep industry knowledge, the health system can focus on their core mission—delivering high-quality care—while ensuring their properties are strategically positioned for long-term success.

The Future of Healthcare Real Estate Management

The strategic partnership model provides an effective solution for healthcare systems facing financial constraints and operational demands, ensuring access to specialized expertise, cost efficiencies, and scalable solutions.

Identifying the right systems where this model fits well is crucial, as common characteristics often determine its success. As healthcare organizations continue to navigate evolving challenges, the adoption of this model is expected to grow, offering a sustainable approach to real estate management.