Private Equity, Health Systems Battle For Denver's Physician Practices And Clinic Space
Competition for physician practices is emerging as one of the strongest forces shaping Denver’s outpatient medical real estate market, panelists said during Bisnow’s Healthcare Real Estate discussion at the Four Seasons Denver.
While independent medical groups have been consolidating for years, panelists said the pace of acquisitions by hospital systems and private equity is accelerating — with direct implications for who owns, develops and leases outpatient facilities.
The market sees fewer solo practitioners or small groups able to operate independently, said Julia Wilson, senior vice president at NexCore Group. Rising administrative costs and reimbursement challenges are pushing many to partner with larger players, she said.
“There’s just this real trend of all these doctors getting JV or backed by private equity or hospital systems,” Wilson said. “So that’s really driving this whole discussion.”
That consolidation is causing health systems to reclaim ownership of buildings they once sold to REITs or other landlords, Wilson said, allowing them to control tenant mix, mitigate risk and manage costs more effectively
Chris Daigneault, real estate director for CommonSpirit Health, formerly Centura Health, said his system is now targeting “strategic core” outpatient assets in growth markets, with ownership decisions tied closely to utilization and service expansion potential.
Private equity-backed practices can offer stronger credit for landlords, Development Solutions Group founder Andrew Shearer said. But he’s seen quality of care and attention to operational detail slip when founding physicians cash out. That tension can complicate lease negotiations and long-term occupancy stability, he said.
With major systems and investors competing for physician tenants, panelists said speed-to-market has become a decisive factor in winning deals.
Oliver Plotkin, principal at Echo Real Estate Capital, said his firm bought two Denver buildings at 50% vacancy and is building three fully fitted speculative suites to meet urgent demand — an approach that lets tenants “come in [and] not have to use too much imagination” while shortening the time to occupancy.
Spec suites are increasingly essential because many doctors “are not interested in writing a check to move into their space” given the high cost of shell build-outs, Plotkin said.
Modular construction is also gaining traction as a way to open facilities faster, particularly in rural areas where labor shortages can slow conventional projects. Daigneault said CommonSpirit is weighing the higher up-front cost against the benefit of serving patients sooner.
Panelists agreed that the coming years will test how far consolidation goes — and how it reshapes the development pipeline. Wilson predicted the shift away from independent practices will continue, making it harder for smaller groups to secure space in competitive markets.
“It’s going to be an interesting next few years,” she said, noting that ownership strategies, leasing models and even building designs are evolving to win — and keep — physician tenants.
