There are many trends in the healthcare real estate industry, but one of the more obvious ones is the new convenience factor for patients. If you are in a mid-size to large city, you have probably noticed all sorts of medical-care options popping up in your neighborhoods, at major intersections, along well-traveled streets and even in your favorite department store or drug store.
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Hospitals, health systems and physicians must find ways to reduce their costs while competitively enticing patients to use their services. With that in mind, patients can now find many sources for common and quick treatments near their homes and can plan ahead for a visit with a specialist near or at a hospital. The convenience factor for patients is also being addressed by huge retailers. It has become common for patients to be treated by licensed medical staff at a Walgreens, CVS, Target or Walmart. The cost compared to going to a specialist or even your primary care doctor can provide a significant savings and is usually covered by insurance.
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Some recent suburban healthcare real estate solutions involve consolidating many physician specialties into former multi-tenant office buildings or newly constructed facilities for that purpose. We’re seeing doctors lease individual offices in suburban office buildings or well-located strip centers, and new urgent care clinics and offsite emergency departments are popping up in very visible retail locations. Today, many common medical issues like simple aches and pains, vaccinations or minor injuries can be addressed by a primary care physician, internist, RN or urgent care clinic – all within a mile or two of home.
Urgent care facilities often operate 24 hours a day, including weekends, so that patients can receive quality care when it is convenient and most helpful to them. Consumers will quickly discover the savings: Nearly half of all visits to urgent care centers results in an average charge of less than $150 — compared to the average cost of $1,354 for an ER visit. Most patients are treated less than 30 minutes and are usually out within an hour.
It has become common for well-located strip centers to be occupied by family practice offices, dentists, optometrists, pharmacies and other complementary services like small restaurants and fitness centers. Statistics say 38 percent of treatments now take place in strip centers, 32 percent in free-standing buildings and 20 percent in multi-tenant office buildings. These retail/medical real estate options, along with multi-tenant and single-tenant medical properties, are very desirable investment options for private investors if the tenants have good credit and plan to lease the space for longer terms.
Most health systems are strategically placing specialists for more serious issues in or adjacent to hospitals. These physicians often include OB-GYNs, cardiologists, oncologists, neurosurgeons, orthopedic surgeons, urologists, gastroenterologists and others. It is common for the medical office buildings (MOBs) located on campus or adjacent to a busy hospital to be well-leased with inviting terms for investors. On-campus MOBs are favorite investments among REITs and private investors, with a growing interest by institutional investors.
Healthcare real estate is a huge growth industry with a focus on better patient care, convenience and cost savings. As it evolves, expect more outpatient services for the convenience of the patient and strategic planning to accomplish competitive advantages and branding, control costs, increase productivity and market share by the health systems.
Beth (CCIM, LEED AP) is a healthcare real estate advisor to health systems with a specialty in the sale of investment properties including hospitals, surgery centers and medical office buildings. She was a former pilot, professional pianist, and dance instructor who co-owned a 25-thousand acre ranch in Wyoming before flipping Texas real estate to fund her early brokerage career.