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Four Healthcare Real Estate Trends You Should Watch

Healthcare providers are getting more savvy about using real estate to support operational strategies and create a competitive advantage. (It's not rocket science, friends... put the orthodontist office near the school, and put the orthopedist near the basketball court.) Working with both tenants and landlords, Lincoln Harris CSG EVP Webber Beall identifies four trends to keep an eye on.

1) Shorter leases


Webber (center, with part of his marketing team) shows us the 12,000 pages of ACA legislation. (Just something to read if you're lounging at the beach or on an airplane.) ACA lowers reimbursements for physicians, meaning they're searching for ways to cut expenses including office space, he says. Doctors and physician groups are looking for shorter lease terms with greater flexibility to buffer against the uncertainty associated with Obamacare, he tells us.

2) Rising construction costs


As construction costs rise and reimbursements are lowered, tenants are looking for ways to minimize their out-of-pocket costs. That impacts both the MOB users and the owners trying to find a happy medium. (Pictured is the W. B. Carrell Memorial Clinic at 9301 N Central Expwy, which Lincoln Harris CSG manages and leases.)

3) Evolving business models


Meeting the needs of the consumer-driven healthcare market means finding more convenient locations. One way is through “retailing” of emergency services, urgent care, primary care, and ambulatory services. These offices are finding their way into more cost-effective environments in locations more accessible to patients. That may be in a strip shopping center between Justice and Buffalo Wild Wings or on pad sites nearby, he says. (Grocery lists: Milk, eggs, mustard, CT Scan, and a rotisserie chicken.)

4) Repurposing obsolete facilities


Underutilized, closed, and obsolete healthcare facilities are seeing new life in a couple of ways, Webber says. They’re upgrading the physician environment to meet more progressive design styles or being repositioned completely to attract healthcare or other kinds of tenants. (Check out the Old Parkland, which is now office space.) Away from the doctor’s offices, Webber loves to camp, scuba dive, and head to the mountains with his family (which includes three boys ages 12, 15, and 16.)