As healthcare providers continue to rethink their real estate footprints, the shift to smaller outpatient centers and medical office buildings is unabated, and commercial real estate developers and investors are responding.

“The trend of these buildings expanding deeper and deeper into local communities, which began about 20 years ago, doesn’t show any sign of slowing down,” said Colliers Engineering & Design National Healthcare Market Leader Ron Goodin. “Developers love these buildings and they continue to return well on their investment.

Goodin will be moderating a panel concerning outpatient and medical office building assets at Bisnow’s Boston Healthcare & Campus Development event on May 14. Also speaking at the event on a separate panel will be his colleague, Teresa Wilson, director of project management for Colliers Project Leaders USA, a division of Colliers Engineering & Design.

Bisnow spoke to Goodin to get his take on healthcare real estate trends both in the Boston area and nationally.

Bisnow: What are some trends you’re seeing in the medical real estate building sector?

Goodin: The medical office building market was created over 20 years ago, driven by the insurance industry, which pushed the hospitals to get clinical spaces out into neighborhoods as much as possible.

Initially, the trend was largely limited to practices like pediatrics or your general practitioner but then broadened to many other specialties, driven by insurance, Medicare and Medicaid reimbursements. The need for higher acuity clinical offerings continued to grow and patients appreciated not having to drive to the big hospital downtown.

Now, medical office buildings have gotten increasingly complex in their own right — think of an ambulatory surgery center — and they can be both new construction and adaptive reuse.

Bisnow: What are some adaptive reuse examples you’ve seen?

Goodin: I’ve seen old office buildings, malls, even grocery stores and movie theaters get readapted into medical office uses. Those types of assets tend to have the ingredients for successful conversion to medical office, including great and ample parking, fabulous signage options and locations along major thoroughfares.

Office buildings can be a challenge to adapt because the floors are often too close together. For medical uses, especially as the acuity level is more complex, HVAC air change is hugely important and takes up a lot of that above-ceiling space.

A grocery store we recently helped convert into a multispecialty unit, on the other hand, was great, because grocery stores tend to have very high ceilings and room for ductwork. Also, because of all the refrigeration grocery stores require, the building had robust and plentiful electricity supply.

It’s very much case-by-case and site-by-site.

Bisnow: Any concerns on the horizon you’d like to flag for our readers?

Goodin: The geopolitical aspect is challenging right now and everybody’s trying to figure it out. There are more unknowns than usual. That said, people still need to see the doctor regardless of what’s happening, which keeps folks motivated to keep developing these kinds of buildings.

Bisnow: Are the trends you’re seeing in healthcare real estate largely national, or do they vary regionally?

Goodin: There are definitely markets that rank high in these regards, including Boston, New York, Northern Florida and Texas. We tend to look at it through the lens of what’s driving the growth: Is it an aging population that needs more healthcare? Or is it the real estate market that’s seeing the value in this asset? The answer is both.

There are simply more people in the U.S. today who require more than just yearly physicals than ever before, and it’s only going to ramp up. The market is responding, and participants are trying to figure out where the best locations to deliver the care need to be.

Bisnow: What about hospital buildings? Are the dynamics there different from other medical assets?

Goodin: Interestingly, we don’t see as much NIMBY on hospital building projects compared to what we hear with other types of development. We make an effort to communicate openly and often with local stakeholders to address their concerns, but I would say that most towns and cities view a hospital as an asset to their community, not as a negative.

First of all, it provides employment. Also, folks appreciate that a local community hospital is there for them for basically everything except the big, acute, trauma-level care like heart and brain surgery. They appreciate the convenience and proximity.

Bisnow: What do you think folks will be most eager to hear about at the May 14 event, and what do you hope they take away from the experience?

Goodin: Because of the mix of developers that will be in the room and on the panel, the emphasis could lean towards returns and cap rates.

People might be interested to learn more about how demographics inform the decisions of where these buildings get developed. Hospitals now operate in networks, so it’s important to look at what their needs are from a broader, network perspective and overlay that with demographic data.

My advice to folks is you can’t wait for the phone to ring and for projects to come to you. You have to be out front, engaging with people and creating relationships. We’re all coming together in an intricate ballet —  the developer, the architect, the engineers, the builders, the doctors, the support staff —  to create the best outcome for the patient at the end of the day.

Healthcare is my passion. After our interview today, I’m attending a ribbon cutting for a C-section ward at a maternity unit and I can’t wait. It’s an incredibly rewarding part of the job.

Visit here to learn more about or to register for Bisnow’s Boston Healthcare & Campus Development event.

This article was produced in collaboration between Colliers Engineering & Design and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.