Are Hospitals the Next Dinosaur?
In five years, the number of hospitals will shrink by a whopping 25% as healthcare reinvents itself for Millennials, and consolidates and moves to more accessible locations. Bisnow’s DC Regional Healthcare will highlight these trends and more on Nov. 12 at the Grand Hyatt Washington starting at 8am. Here's a preview.
Among our panelists, the Centers for Advanced Orthopedics VP Louis Levitt says Millennials are driving many of the trends in healthcare real estate. One of the biggest is that more hospitals and healthcare systems are going to where patients are rather than forcing patients to come to one large facility in a remote location, says Louis, with Bialek Healthcare CEO and wife Joan Bialek, whose firm is our event partner. In-patient services will be absorbed by outpatient healthcare alternative facilities, he adds.
The number of healthcare facilities around the region, however, is growing. Louis says very few health services existed east of 16th Street, and now there’s a growing wave of healthcare centers opening throughout the District and the region. Hospitals are also in trouble as their emergency rooms face growing competition from urgent care centers in shopping centers and within retailers like CVS and Walmart.
That doesn’t mean hospitals aren’t trying to stay competitive. Sibley Memorial, which has been providing care in DC since 1890, partnered with Baltimore-based Johns Hopkins five years ago to provide more healthcare services offered by the prestigious Hopkins medical staff and grow its footprint. Sibley real estate and construction SVP Jerry Price says the hospital is in the middle of a $500M expansion that includes an 800-car garage, a 140k SF surgery center, a whole floor of medical retail and a new $242M tower with 220 beds.
Another trend to watch is healthcare consolidation, says Ober, Kaler, Grimes & Shriver principal Howard Sollins, also a panelist. Medical groups are getting scooped up by hospital systems or they’re combining into larger systems that can be more nimble in adapting to the healthcare marketplace. Howard says the trend is creating opportunities for real estate as these newly formed groups create hubs for primary care or other specialty services. Louis, whose orthopedic group is one of the largest in the country, says his company was able to cut real estate costs by bringing competing orthopedic practices under one roof.
Given the large number of health systems throughout the DC region, going to the doctor won’t be combined with picking up groceries quite yet, says Rappaport VP Steve Carboni (right with colleagues Henry Fonvielle and Gary Rappaport). The retail market has high demand with low vacancy, he says, and healthcare systems and providers continue to focus on attractive medical office deals and bountiful options. The more select medical uses will continue to fill gaps by focusing on highly visible, urban and suburban retail locations that also have high-density residential or office.
Another trend to watch in healthcare, says Howard, is the rise of post acute care such as nursing homes, assisted living and hospice services. These type of operations will only grow and they’ll go in markets that are convenient to the patient, he says. To learn more, please join us for Bisnow’s DC Regional Healthcare Nov. 12 at the Grand Hyatt Washington starting at 8am. Sign up here!