Ascension Saint Thomas Rutherford Plans $60M Medical Office Building In Middle Tennessee

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A multimillion dollar health care facility is coming to Rutherford County.

Ascension Saint Thomas Rutherford will begin construction on a $60 million multispecialty medical office building on the hospital’s campus in 2023, according to a news release. A portion of the 102,000-square-foot building will house The Ascension Saint Thomas Cancer Center, a new cancer partnership with Tennessee Oncology.

Ascension Saint Thomas Rutherford is Middle Tennessee’s seventh-largest hospital, according to Nashville Business Journal research, with 286 beds and more than 1,000 employees. The announcement comes in the midst of a $110 million campus investment into the main Ascension Saint Thomas Rutherford hospital, which is set for completion in 2024 and includes the construction of a parking garage.

The Ascension Saint Thomas Cancer Center will feature surgical, medical and radiation cancer care specialists who will focus on cancer provention, detection and treatment, according to the release. Tennessee Oncology is one of the largest oncology practices in the U.S., according to the release, with 30 centers across 30 states.

“Cancer impacts more than 1.7 million Americans annually. We want to reimagine cancer prevention and care to make screenings and treatment more convenient for the many individuals right here in Murfreesboro and Rutherford County who have been or will be affected,” Gordon Ferguson, president and CEO of Ascension Saint Thomas Rutherford, said in the release. “We are honored to partner with the innovators at Tennessee Oncology in a shared goal of fighting cancer in our community.”

 

Source: Nashville Business Journal

AEW JV Acquires Eight Medical Buildings In Seven States Across The Southern And Midwestern U.S.

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A joint venture between AEW Capital Management and Flagship Healthcare Trust have completed the acquisition of eight medical buildings totaling 145,561 square feet in seven states across the Southern and Midwestern U.S. in a series of compounding transactions.

The purchase was financed through a loan by Fifth Third Bank, who had secured a senior credit facility for the buyers. Following the acquisition, Flagship will provide property and asset management services for the portfolio.

The facilities, which consist entirely of ambulatory surgery centers, are located in Texas, Arizona, Michigan, Illinois, Missouri, Tennessee and Florida. Nearly all of the tenants leasing space within the portfolio specialize in health care, with three quarters of them in top five national surgery centers and health systems.

Two of the properties in the portfolio include the Kleimen Evangelista Eye Center, located at 350 E Interstate 20 in Arlington, Texas, and the Joliet Surgery Center, located at 998 129th Infantry Dr. in Joliet, Ill.

The Kleiman Evangelista Eye Center was built in 2015, and was previously owned by the Inland Real Estate Group, who had purchased it in 2017, according to CommercialEdge information. The property totals 27,500 square feet and is fully occupied by a leading Texas ophthalmology provider. Situated the Interstate 20 highway, the facility can be quickly accesses by patients throughout the suburbs of Arlington, as well as the larger Dallas-Fort Worth area.

Fifth Third Bank Executive Managing Director Michael Perillo oversaw the financing of the transaction.

The Medical Office Mires

Health-care and life science facilities remain a resilient commercial real estate investment, with investors eager to get their hands on these properties. The sector recorded more than $2.9 billion in transactions in the second quarter of 2022, according to data from a report from the Brown Gibbons Lang & Co. While that marks a slight decrease from the $3.3 billion in the same period of 2021, it significantly outranks activity in other office markets.

Market Street Health Properties and Sixth Street recently created a platform to invest $300 million in medical office buildings around the nation.

 

Source: Commercial Property Executive

Study: North Texas Hospitals Have a $38.4 Billion Economic Impact

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Healthcare continues to be one of North Texas’ most important economic drivers, with an increase of $7.7 billion in economic impact since 2017.

A new study commissioned by the Dallas-Fort Worth Hospital Council shows that healthcare makes a $38.4 billion economic impact on the region.

“We were impressed by the significant increase and impact for North Texas over the past five years,” said Stephen Love, president, and CEO of DFWHC via release. “Such a positive economic impact is extraordinary, especially considering the challenges facing hospitals over the past two years during the COVID-19 pandemic.”

The study, which DFWBGH’s Board of Trustees commissioned, highlights statistics provided by the 90 DFWHC hospital members. The institutions provided $26.1 billion in labor income, $5.9 billion in retail sales, and $6.4 billion in federal, state, and local taxes. The members also represented 372,988 jobs in 2022, an increase from 295,138 in 2017.

The numbers from this region reflect a recent U.S. Bureau of Labor Statistics report from 2020, saying that the healthcare sector will add 2.6 million jobs over the next decade, with nurse practitioners growing incredibly quickly, at 45.7 percent. As the Baby Boomer population ages and has increased chronic conditions, healthcare will be more in-demand than ever, and healthcare is expected to grow quicker than any other industry.

The economic impact was measured by calculating the business transactions of all industries within a hospital’s service area, DFWHC’s region, and the state. It also measured the hospital and employee spending while calculating the number of jobs and income created through healthcare positions.

Despite the economic impact, many hospitals are struggling to stay in the black. Because reimbursement rates are negotiated yearly, it is more difficult for healthcare entities to increase prices if the cost of supplies and labor fluctuates, as they have in the last year. Bloomberg reported in September that 53 percent of all hospitals to lose money in 2022. Delayed care due to the pandemic has resulted in sicker patients, labor shortages have forced providers to increase pay to attract talent, and inflation has raised input costs.

Consulting firm Kaufman Hall and the American Hospital Association research showed that in 2019 and 2021, around 35 percent of hospitals experienced losses, but in 2022 and 2020, more than half had negative margins. Staffing turnover and paying for travel nurses to address shortages have been significant cost drivers. Nationwide, the Kaufman research said that expenses for U.S. hospitals would climb $135 billion over last year’s levels, with $86 billion representing labor cost increases.

But increased salaries, real estate, and material costs for hospitals all equate to a more significant economic impact, all while many hospital systems struggle to stay profitable. In many areas, the hospital is the largest employer in the region, and as organizations move toward building hospitals as wellness centers, they play an increasingly important role in communities.

The DFWHC study was created by Ann K. Peton, director of the National Center for Rural Health Works and the National Center for the Analysis of Healthcare Data.

“These numbers show North Texas hospitals do much more than just provide medical services,” said Peton via release. “The employment and income generated and the ripple effect in other businesses throughout the economy are enormous. The study clearly demonstrates that DFWHC-member hospitals are major players in economic development in Texas.”

 

Source: D CEO Magazine