Consolidation In Healthcare Spurs Medical Investor To Adopt Large Tenant Strategy

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Consolidation in the healthcare industry is spurring a need for large blocks of medical office space.

Medical office building at 3531 Fashion Way in Torrance (PHOTO CREDIT: Meridian)

Medical real estate investor and developer Meridian has adopted a large tenant strategy for its latest acquisition. The property, a 26,000-square-foot medical office building in Torrance, was 100% vacant at the time of the sale and was marketed as a redevelopment opportunity. Instead of redeveloping the property into another use, Meridian saw that this would fulfill a need for large medical office tenants, and it was able to secure a tenant for half of the property during escrow.

“As the healthcare industry continues to consolidate, we’re seeing much more demand for larger blocks of contiguous space,” R.J. Sommerdyke, director of acquisitions at Meridian, tells GlobeSt.com. “We felt particularly good about this acquisition because it represented a unique opportunity to provide tenants with one of the only options in the market for large blocks of ground-floor space, which is very desirable from a medical perspective. We’re already seeing our thesis being proven by securing a large tenant so early-on in the process.”

The renovation will be complete late next year, but the early leasing activity bodes well for early lease-up.

“The property was previously operated as an imaging and radiation oncology center,” adds Sommerdyke. “As such, the building housed two linear accelerator vaults, which are used for radiation therapy in cancer patients. These vaults are extremely expensive to construct at $1.5 million to $2 million each, and by having those improvements in place, we can offer a very compelling rental rate to a future tenant who can utilize those improvements versus having to construct them on their own.”

The location will also help to promote leasing activity, and was a major reason why Meridian saw potential in the property.

“Meridian pursued and ultimately purchased the property due to the unique location between two major hospitals and the inherent value in the existing building improvements,” explains Sommerdyke.

While the micro-market is ideal for the medical office project, Torrance in general has improving fundamentals that helped to drive Meridian’s interest in the property.

“In addition to great demographics, the medical office fundamentals for Torrance are strong and continue to improve,” John Pollock, CEO of Meridian, tells GlobeSt.com. “The submarket has consistently experienced positive net absorption since 2010 and market vacancy for medical has dropped to single digits.”

 

Source: GlobeSt.

Medical City Fort Worth’s New $65 Million Tower Expands ER, Intensive Care Unit

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Medical City Fort Worth will begin accepting patients in a new three-story, $65 million tower that expands its emergency services.

The facility includes a new emergency department and intensive care unit (PHOTO CREDIT: Medical City Fort Worth)

The 90,000-square-foot tower includes a 30-room emergency department, a 28-bed intensive care unit and a rooftop helipad for easier access to the ER.

Jyric Sims, CEO of Medical City Fort Worth, described the project as “a labor of love” that brings advanced technology to its emergency room. The expansion includes six pediatric care rooms, two trauma rooms and one room equipped for behavioral health patients.

The new tower, under construction since May 2017, will be connected by a skywalk over 9th Avenue to the hospital’s old building, which will remain open for other patient services such as surgeries and cancer treatments. The hospital is licensed for 320 beds.

Founded in 1976 as Medical Plaza Hospital, the hospital is part of Medical City Healthcare, one of the region’s largest health care providers. It operates 14 hospitals, seven off-campus emergency rooms and more than 50 ambulatory sites across Dallas-Fort Worth.

Medical City‘s parent company is Nashville-based HCA Healthcare, which ranked 63rd in this year’s Fortune 500 with annual revenue of $47.6 billion.

 

Source: Dallas News

Innovation In Healthcare Technology Changing the Game For Hospitals And Healthcare Centers

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Innovation in healthcare technology has changed the rules of the game for hospitals and healthcare centers. It has and continues to do so.

As in other industries, healthcare will be disrupted by advancements in technology like telemedicine and virtualized care programs, which are already rising in popularity with patients.

But how will it impact brick-and-mortar space? Panelists at the recent RealShare Healthcare conference here in Scottsdale, AZ, said that telemedicine will not replace the need for office visits. Panelist say it will not take away from the real estate.

“What it will do is create efficiency” according to Justin Brasell, EVP of healthcare advisory services at Transwestern. “We are missing a lot of people due to inefficiencies. We will continue to see more admissions and I think telehealth is also a differentiator.”

He pointed out that when you are a physician that offers telehealth, it is about hook/add for your patient to come back.

“Telehealth will continue to drive occupancy and real estate but it will change what that real estate looks like. It is a great compliment to real estate and supercharge,” Brasell said.

Brasell is hyper focused on standardizing the physician clinic and piping in fiber for additional technology in the space.

“The future is about standardization and flexibility within the new construction developments,” Brasell said.

Jake Dinner, SVP of development at PMB said that if you take a step back from the layout of the space, the strategy behind the clinics really get into the data and determining the right size for the building, what are the service lines and when are they going to come available etc. so you can plan for future growth.

“We try to use data as much as possible. We work with clinical analysts to determine what needs to go into the building paired with telehealth,” Dinner said. “It is about being strategy based.,”

When asked about risk in telemedicine, Dinner doesn’t see the risk in it and says health systems mitigate risk as much as they can.

“The biggest thing with the evolution of telehealth will be education of the providers,” Dinner said. “The place healthcare technology will be most vulnerable will be the patient data for healthcare systems, which are 200 times more likely to get hacked than any other industry. There has been a huge influx in cyber protection and that impacts real estate because it significantly impacts their bottom line and they are looking to the real estate side to help with that.”

 

Soure: GlobeSt