Two Class-A Medical Office Buildings Sell In Suburban Nashville Submarkets

CBRE U.S. Healthcare and Life Sciences Capital Markets announced the sale of Aspen Grove Medical Plaza and Spring Hill Medical Plaza located in suburban Nashville.

Lee Asher, Chris Bodnar, Jordan Selbiger, Ryan Lindsley, Sabrina Solomiany and Zack Holderman partnered with Morgan Hillenmeyer from CBRE Tennessee Healthcare Investment Properties to act as the seller’s exclusive advisors.

Aspen Grove Medical Plaza and Spring Hill Medical Plaza located in Nashville, Tennessee

Both medical office buildings are located within the southern suburbs of Nashville in the high growth submarkets of Franklin and Spring Hill, Tennessee.

The two assets are a combined ±88,533-square-feet and are currently 86% leased. Snodgrass-King Dental, a major regional dental practice owned by North American Dental Group, anchors both buildings and Williamson Medical Center, a county owned and operated health system, operates an internal medicine practice at the Spring Hill Medical Plaza.

Other services offered include oncology, orthopedics, oral surgery, gastroenterology, dermatology, reproductive medicine, pain management, primary care, internal medicine, physical therapy, dentistry and endodontics.

 

Source: HREI

COVID-19 Has Altered The Speed And Design Of Healthcare Projects, Perhaps Irrevocably

A six-story, 180,000-sf patient tower addition to BayCare St. Joseph’s Hospital in Tampa, Fla., was well under way when, in the summer of 2020, the healthcare system wanted to open three patient floors earlier than scheduled to accommodate the COVID-19 pandemic’s anticipated surge.

The project’s construction manager, Robins & Morton, brought in additional supervisory staff to coordinate this compressed schedule with other building team members, which included AE firm HOK and structural engineer Carastro Engineering.

“As a result of this collaboration, the tower opened two months early, in July 2020,” says Robins & Morton’s President and COO Robin Savage.

This has been a common tale during the pandemic, told by AEC firms whose healthcare clients want their projects up and running quicker, a task made more complicated by the shortage of skilled labor in many markets.

“A major challenge has included changes made during design and construction while maintaining the budget,” states Matthew Holmes, Global Solutions Director of Health Infrastructure for the construction management firm Jacobs, 70 percent of whose healthcare-related work last year involved in-patient design.

To mitigate this issue, Jacobs continuously forecasts estimates during a project to leverage proper budgeting.

“Taking the time to accurately scope the project in the budgeting process is essential,” Holmes says.

“The healthcare core market continues to operate on razor-thin margins,” observes Hamilton Espinosa, DPR Construction’s Healthcare Core Market Leader. “The need to project value and efficiency is at the forefront of key decision-making.”

A geotechnical report conducted during preconstruction of a 32,000-sf Veterans Affairs outpatient clinic in Johnson County, Kan., uncovered an unexpected need for rock excavation totaling $150,000. McCownGordon Construction, the project’s CM, reduced that allowance to $100,000 by rerouting the water, fire, and storm utilities, recalls Daniel Lacy, the firm’s Vice President−Healthcare and Life Sciences.

Many of Jacobs’ healthcare projects entail what Holmes calls “progressive design-build,” where the designer and builder work together “from day one with an established budget and program description.” Early project team engagement, asserts Pepper Construction’s Project Director Brian Mullen, CHC, LEED AP, is critical because “it leads to more informed design.” And by remaining flexible to accommodate future improvements in interior remodeling, Pepper “can help ensure that clients are prepared to incorporate the latest technology.”

By aligning a project manager with key designer, trade partner, and healthcare system personnel, McCarthy Building Companies is able to “triage” questions and ask only what’s needed to move the project forward.

“Then, it can provide options for consideration,” says Patrick Peterson, McCarthy’s Executive Vice President of Healthcare for the Southern California region.

AEC firms have had to be creative to find skilled labor to complete healthcare projects within time and budget parameters. To connect with smaller and more diverse subcontractors,

“Skanska breaks up its bid packages to widen the labor pool,” says Chris Hopper, its Vice President and General Manager.

Skanska also conducts its Construction Management Building Blocks Training Program in its offices across the country to engage smaller subs through partnership and business development.

Healthcare Projects Back on Track

AEC Giants contacted for this report say they’ve been working on a wide range of healthcare projects. But the agenda for some clients shifted between 2020 and 2021.

“Most of Henderson Engineers’ healthcare projects over the past year were for temporary measures that included infrastructure to support care for COVID-19 patients,” says Mark Chrisman, Healthcare Practice Director for Henderson Engineers and Henderson Building Solutions. “But since early 2021, demand for construction and renovation projects of all sizes has reverted close to pre-pandemic levels.”

During the pandemic, DPR Construction pivoted to respond to help with clients’ immediate needs. But much of its work continued to be for new hospitals and patient tower expansions.“

“There’s strong demand for outpatient care, too, although health systems are re-evaluating program sizes to factor the impact of virtual healthcare and remote patient monitoring for lower-acuity chronic case management,” say Sean Ashcroft and Deb Sheehan, DPR’s Healthcare Core Market Leader and Healthcare Strategy Lead, respectively.

HKS-designed VCU Health’s ground-up 500,000-sf Children’s Hospital of Richmond is being built by DPR Construction and is scheduled for completion in 2023. For the first time, VCU Health’s pediatric services will operate from one building, dubbed the Wonder Tower, with 72 private rooms and shell space for 48 more if needed. The tower will connect by bridge to the hospital’s outpatient pavilion built in 2016. The hospital’s Emergency Department will extend 5,000 sf. (RENDERING CREDIT: HKS)

While new construction that included the nine-story Children’s Mercy Research Institute in Kansas City, Mo., accounted for McCownGordon’s largest recent healthcare projects.

“The majority, in terms of volume, have been adaptive reuse,” says Lacy.

McCarthy’s Peterson points out that healthcare clients are exploring strategies for maintaining aging buildings and repurposing existing  spaces for a changing service model. AEC firms are engaging more renovations and expansions, too. McCarthy recently worked on theLoma Linda University Medical Center’s Campus Transformation Project to bring it up to California’s seismic compliance requirements.

Brian Forsythe, LEED AP, CHC, Pepper’s Vice President and Project Director, predicts that clients who have delayed master-planning projects will need to move forward to remain competitive. And he cites a trend toward public-private partnerships to fund healthcare projects, such as the University of Illinois Health’s 205,000-sf Outpatient Surgery Center and Specialty Clinics in Chicago, for which Provident Resources Group, a 501(c)(3) corporation, is financing three-quarters of the building’s $194 million total cost through tax-exempt bonds, and will lease the building to UI Health during the 30-year term of the bonds. This project should be completed next year.

Universal Patient Rooms Are In Vogue

Alternative project delivery is among the design and construction trends that have emerged in the healthcare sector. The University of Illinois project, designed by Shive Hattery, deployed modular construction to stay within budget.

“One of Robins & Morton’s priorities is to determine how to leverage prefabrication and modularization,” says Savage.

And during the pandemic, the controlled environment and potentially higher production rates that prefab offers “took on a renewed sense of urgency” for McCarthy. Peterson says prefab systems his firm now focuses on include exterior envelopes, framing and wall panels, MEP, medical and interiors, bathrooms, and vertical transportation.

The $329 million, 444,000-sf expansion and renovation of the University of Virginia Health System’s University Hospital in Charlottesville increased bed capacity to 84 (all of them ICU-compliant), with the potential for up to 180 beds. The architect was Perkins and Will. Skanska the CM at Risk on this LEED Silver project, which was completed in July 2020. (Photo: Halkin|Mason Photography,Courtesy Skanska)

Skanska is among the AEC firms that have been getting more requests for larger private and “universal” rooms. For its University of Virginia Health System hospital expansion in Charlottesville, Skanska built a patient tower with fully ICU-compliant universal patient beds.

“Healthcare providers are showing a strong desire to establish permanent isolation rooms to manage patients during infectious disease outbreaks,” said Chrisman of Henderson Engineers.

Other trends in healthcare projects that Jacobs’ Holmes is seeing include high-end technology for patient and procedural spaces, combined heat and power turbines for steam and electricity, combined pre- and post-recovery bays, more space allotted for telehealth and behavioral health, and growth in emergency departments.

The Phoenix-based architectural planning and interior design firm Orcutt | Winslow has experimented lately with alternate structural solutions to steel framing and joists, such wide-flange structural frames and steel-masonry hybrids.

“The firm is also increasingly using Lean approaches, such as pull planning, to improve a project’s speed to market,” says Chuck Hill, its Healthcare Studio Leader.

Matthew Kennedy, Orcutt | Winslow’s Senior Healthcare Planner, adds that his firm has tried out several digital media platforms—such as Miro and Microsoft Teams—for communications and file sharing. It’s not alone, as virtual interaction has become the norm in a socially distanced world.

When the pandemic hit, Skanska saw an opportunity to use StructionSite, a project site photo documentation software, to conduct virtual job walks abetted by advanced imagery and video.

“Pepper leverages web-based platforms to bring everyone to the jobsite virtually,” says Forsythe.

During the pandemic, Pepper also launched Virtual Reality Training modules, and expanded its use of TouchPlan with the Last Planner System for digital pull planning. Robins & Morton’s application of technology for healthcare projects includes entirely virtual mockups, 3D printing, augmented reality, and testing robots to photograph and laser-scan jobsites.

Sustainable And Resilient Healthcare Buildings

Healthcare systems are trying to change their reputation for being profligate users of energy and water by seeking project solutions for efficiency, carbon neutrality, sustainability, and resilience.

Savage of Robins & Morton points out that healthcare clients are interested in stemming carbon emissions that are mostly released from the material supply chain before a new or renovated facility even opens. Skanska’s Hopper cites a 2020 Health Affairs study, which estimated that the healthcare industry accounted for more than 8 percent of CO2 emissions in the U.S.

“Healthcare systems have made carbon reduction a part of their collective mission and values,” says Hopper.

Concerns about embodied carbon can be tied to a larger effort among healthcare systems and their AEC partners in favor of environmental sustainability and resilience. One of Robins & Morton’s projects—the recently completed Fisherman’s Community Hospital in Marathon, Fla.—sits on higher elevation to combat storm surges, has a tilt-up concrete core, and includes impact-resistant exterior and removable flood barriers.

Chrisman expects larger healthcare systems with financial means to be the main drivers of sustainability and resilience over the next decade. Client demand was one of the reasons why Henderson last April hired its first director of sustainability, Brian Alessi, AIA, LEED AP BD+C, who has worked on more than 400 LEED-certified, net-zero, and passive house projects.

By August 29, Louisiana had evacuated 22 nursing homes and 18 assisted living facilities as Category 4 Hurricane Ida was pounding that state’s coast. However, 2,400 COVID-19 patients still in Louisiana hospitals hadn’t been moved, partly because there was no other place to put them, but also because modern hospitals are better prepared to stay open during natural disasters.

“COVID-19 has made clear there is a need to increase and maintain resilient healthcare systems through a holistic approach to how, when, and where we access care,” says Jacobs’ Holmes. “Sustainability is a required item and, at Jacobs, that means ensuring long-term business resilience.”

“Resilience is built into every healthcare design we see,” says McCarthy’s Peterson.

And Hill of Orcutt | Winslow is confident that once this sector is less distracted by its immediate supply-chain issues, “resilience will emerge as a driver for healthcare projects.”

 

Source: Building Design + Construction

 

Nonprofit The City Of Hope In Talks To Acquire Cancer Treatment Centers Of America For $390M

California-based The City of Hope just announced that it is in talks to pay $390 million to acquire Boca Raton-based Cancer Treatment Centers of America, a network of oncology hospitals and outpatient care centers.

The deal is expected to close in early 2022, subject to regulatory approval. After close, City of Hope officials plan to convert CTCA to a nonprofit organization.

Combined, City of Hope and CTCA have 11,000 “team members,” which includes collaborating physicians across California, Arizona, Illinois and Georgia.

“City of Hope’s acquisition of CTCA and the transition of CTCA to nonprofit status should enhance and expand its battle against cancer,” said John Balitis, chairman of the Labor & Employment Department at Jennings, Strouss & Salmon PLC law firm in Phoenix. “Unlike a for-profit business that maximizes revenue for distribution to owners, a nonprofit entity recycles what otherwise would be profit back into the entity to further the entity’s mission and purpose. Tax concessions for nonprofits also free up funds for use in pursuing goals and objectives that otherwise would be unavailable in a for-profit setting. Such a change for an organization like CTCA is positive when you consider how vital research and clinical trials are in the cancer treatment industry. In Arizona, where CTCA has four locations, we might expect an expansion in programs as well as facilities as more funds become accessible to further the organization’s goals rather than to be paid out as dividends.”

Reduce Operating Costs

The combination of City of Hope and CTCA also can provide the combined organization with the economies of scale that reduce operating costs and provide the opportunity to reinvest those dollars into research, technology and other modes of life-saving innovations that can benefit patients, said Joan Koerber-Walker, president & CEO of the Arizona Bioindustry Association.

“With missions that are closely aligned and that put the needs of cancer patients first, this looks to be an excellent opportunity to improve the lives of cancer patients and the people who care about them,” Koerber-Walker said.

Joseph Lupica, chairman of Newpoint Healthcare Advisors LLC, said City of Hope has had a sterling reputation as an outstanding provider in a high acuity setting.

“With today’s emphasis on value-based care, however, if a single-specialty hospitals has a high cost of care to go with all that excellence, they can quickly find themselves on the wrong side of history,” Lupica, a Fellow of the American College of Healthcare Executives, said. “Patients and payers demand value, which considers both quality and cost. This is especially in a market where UCLA, USC and Cedars-Sinai Medical Center all have extremely well-regarded cancer programs, but have a broader base of services.”

The last time Lupica studied that market, he found that City of Hope’s publicly-reported cost per day was almost 40% higher than other hospitals in the San Gabriel Valley, even after adjusting for case mix acuity.

“With this acquisition, maybe City of Hope has found a business proposition that will improve their value equation — quality and cost — by diversifying their base and learning from an efficient company,” Lupica said. “And they can do it without moving away from their core clinical competency.

 

Source: SFBJ