How Medical Offices Fuse With Mixed-Use Projects

/in , , , /by

With the need for medical services on the upswing and an increased overall preoccupation for wellness, communities across the nation have been looking for solutions to bring health-care services more within their reach.

For a growing number of mixed-use developments, medical offices are becoming the ultimate amenity, making convenient care available in settings that feature modern technology and are minimizing the unpleasant clinical experience.

HSA PrimeCare Executive Vice President Robert Titzer points out that while the era of academic medical centers is not over, demand for smaller medical offices located in sites with good visibility and ample parking is expected to rise. What’s more, given that medical offices are considered safer investments in times of economic slowdown than retail and hospitality assets, adding a health-care component to a larger development ensures its stability on the long run.

Commercial Property Executive: What type of mixed-use developments is incorporating medical office spaces and do you think luxury projects are benefiting more from this addition?

Robert Titzer: Medical offices can be incorporated into a wide variety of mixed-use developments. Everyone needs health-care services, at all income levels, and essentially wherever people live and work. So, whether the project is deemed a luxury product or otherwise, there is often a health-care application that can make sense in the overall development.

Commercial Property Executive: What criteria does your company apply when choosing a location for a new MOB project that will be part of a mixed-use?

Robert Titzer: Our company’s decision-making closely follows that of the designated health-care provider. That is, we attempt to align the provider’s ambulatory care strategy with location and site selection on the macro level. On the micro level, we look for sites that have good visibility, intuitive wayfinding, ample parking and/or transit access.

Commercial Property Executive: Accessibility is a great advantage of health-care projects. Are there any disadvantages that mixed-use property managers could address better?

Robert Titzer: The challenge that many owners find is dealing with the mix and volume of patient and customer flow in and out of mixed-use sites. Medical facilities operate best when their patients do not have to compete for parking or access with other component users of the development, because oftentimes the patient population is not as physically mobile as a shopper, for instance. They need drop-off areas and protected parking close to their destinations.

Commercial Property Executive: Tell us about how you succeeded in attracting Froedtert & the Medical College of Wisconsin to Drexel Town Square and how do health-care providers usually see the concept of a MOB as part of a mixed-use development.

Drexel Town Square. (IMAGE CREDIT: HSA Commercial Real Estate)

Robert Titzer: Drexel Town Square is an exciting new “front door” for Oak Creek, Wis., and having a health-care component dovetailed perfectly with the development’s mix of community, retail and residential uses. Its location made perfect sense for Froedtert & the Medical College of Wisconsin. As part of a larger 85-acre mixed-use project that includes a new city hall, public library, shopping, restaurants, service-oriented businesses, hotel and apartments, a MOB fits into this modern, master-planned development. HSA PrimeCare worked hard to ensure the development addressed the access issues mentioned above. We also programmed flexibility into the design by approaching it as a mini-campus that could adapt and grow with the health-care system’s needs over time.

Commercial Property Executive: What are your expectations from the medical office sector going forward?

Robert Titzer: We see continued strong demand for ambulatory care facilities in a wide variety of locations, as health-care providers strive to reach their patients more effectively by providing easier access, and to serve their patients more economically in ambulatory care settings versus in-hospital care. Consolidation of sites of care is also a driver in the establishment of newer, more modern and efficient buildings that can drive operating efficiencies for health-care systems.

Commercial Property Executive: What should health-care property managers focus on more at this late point in the economic cycle?

Robert Titzer: At HSA PrimeCare, we always strive to stay ahead of the game. That means being prepared for what your building needs to be five years from now, not simply what it is today. That also means keeping the property in A-plus condition and anticipating tenant needs as uses evolve with the change in health-care delivery. This could encompass improvements such as common-area renovations, or services and amenities like enhanced on-site dining and snack options.

Commercial Property Executive: Today, we’re seeing a lot of focus on wellness rather than just getting treatment. Is the era of mega hospitals and medical campuses coming to an end?

Robert Titzer: We see the large academic medical centers taking on increased importance in our society as places where groundbreaking research takes place and extremely complicated care is delivered to the most challenged patients. These centers will continue to grow in importance as it is an exciting time for medicine. Medical professionals now have vast troves of medical data at their disposal that can be used to tackle these mega-challenges. Academic medical centers are uniquely positioned to take on this task, which makes their existence all the more important in today’s world.

 

Source: Commercial Property Executive

Boca Raton Medical Office Building Sells For $34M

/in /by

A medical office building in Boca Raton that lists Boca Raton Regional Hospital as a tenant sold for $34 million.

Boca Raton Medical & Surgical Specialists, managed by Dr. Roy Katzin of Greenfield Group, sold the 77,017-square-foot medical office building at 1601 Clint Moore Road to AW Boca Clinic LLC, an affiliate of North Palm Beach-based commercial real estate firm AW Property Management, led by Brian K. Waxman.

 

Click here to read more about this story.

Health Care Real Estate Could Be A Coronavirus Safe Haven

/in /by

It’s hard to imagine many stocks will do well through the coronavirus pandemic. But health care stocks and real estate investment trusts tend to be defensive sectors that investors flock to because they pay huge dividend yields.

So what happens when you combine the two?

Health care REITs might be a good bet in this scary market environment. Many are positioned well to help manage the COVID-19 coronavirus crisis, particularly companies that own and operate hospitals, medical offices and life sciences and biotech facilities.

“Health care REITs are generally the most defensive, economically resilient property type in the REIT industry,” said CFRA Research analyst Kenneth Leon in a report last week. “The group offers steady cash flow, low risk of rental rate volatility, and stable occupancy levels.”

Leon said that three in particular that he’s recommending are Alexandria Real Estate Equities (ARE), Healthcare Trust of America (HTA) and Medical Properties Trust (MPW).

Healthy Dividend Yields Are A Big Plus In Uncertain Times

The recent interest rate cut by the Federal Reserve may also help boost health care REITs — and all real estate firms — because of their solid dividend yields.

The three healthcare REITs that Leon recommends pay dividend yields ranging from 2.7% to 5%. With the Fed widely expected to slash interest rates again at its meeting next week, perhaps all the way back to 0%, the income that REITs generate will become even more tantalizing to investors flocking to safe havens.

“While COVID-19 has created near-term economic uncertainty, the REIT industry’s strong earnings, solid balance sheets, and high occupancy rates demonstrate that they are entering this situation well-positioned to handle a potential economic slowdown,” said Steven A. Wechsler, president and CEO of the Nareit trade group.

Senior Living Centers Look Risky

But not all health care real estate firms will thrive. Leon thinks investors should avoid companies that run senior living centers, because they won’t be able to safely show their properties to prospective new residents. He noted that many went into lockdown mode during the flu season of late 2017 and early 2018. And the COVID-19 outbreak is even scarier.

“Coronavirus may limit senior housing operators from showing their properties to prospective residents,” Leon wrote. “Precaution is a top priority for health care operators to better control an elevated death rate from severe flu conditions for the elderly.”

Leon remains wary of companies that operate senior housing centers, most notably Healthpeak Properties (PEAK), Ventas (VTR) and Welltower (WELL). Their rental revenue and profit growth will probably be squeezed by the admission of fewer residents.

“Operators cannot conduct visitor tours and sign up new residents.
Senior housing is in effect quarantined to new prospective residents and their families,” Leon wrote.

 

Source: CNN Business