Now's the time to go hunting for healthcare properties in greater Seattle—whether you build ‘em or buy ‘em (but if you need 'em for an emergency, just go to the closest one). NexCore SVP of healthcare development Tim Oliver tells us why.
1) Fundamental changes in healthcare delivery
Healthcare is moving from a hospital-centric model—in which doctors and hospitals provide remedial care to a sick or injured patient—to a system in which service is provided in a neighborhood setting focused on preventative care, Tim explains. (We're going back to the Andy Griffith Show model of town doctors.) That kind of fundamental change is requiring new facilities located close to where patients live, leading to development opportunities.
2) The squeeze on healthcare systems
Healthcare systems are being squeezed from all sides on their reimbursements, while at the same time they're faced with intense capital demands, Tim says. The costs for recruiting new physicians, healthcare information tech, new ambulatory care facilities, and ongoing facility depreciation are ganging up to create more impetus for hospitals to monetize their real estate. Thus the acquisition market is very strong, driven by all-time high cap rates and low debt rates. Pictured: Medical Building Monroe, a 43k SF off-campus ambulatory facility that NexCore developed last year for Providence Medical Group in Monroe.
3) Good, old fundamentals
It can’t be stressed enough (despite what doctors say about stress being bad for your health): This retooling of the healthcare system coupled with population growth will create new healthcare real estate development and acquisition opportunities. That’s the case even in youth-oriented Seattle. “Institutional and private investors have strong appetites for high-quality healthcare real estate,” Tim says.
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