How Medical Offices Fuse With Mixed-Use Projects

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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

PEBB, Tortoise Properties Acquire Jupiter Medical, Office Building For $31M

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Private real estate investment company PEBB Enterprises and Tortoise Properties, family office focused on acquiring residential and commercial legacy assets, have acquired the Jupiter Innovation Center, a 186,238-square-foot office building in Jupiter.

The sales price was $31.4 million.

Located at 1701 Military Trail, Jupiter Innovation Center is the town’s largest for-lease office building. The single-story campus is just one mile south of the 327-bed Jupiter Medical Center, a 55,000 square foot, state-of-the-art cancer center.

Jupiter Innovation Center has a mix of medical, office and research and development tenants. Florida Turbine Technologies is the largest tenant at JIC with more than 64,000 square feet, and has occupied space at the building since 2005.

Scott O’Donnell, Michael Ciadella, Dominic Montazemi, Greg Miller and Miguel Alcivar of Cushman & Wakefield represented the undisclosed seller in the transaction. Additionally, Jason Hochman of Cushman & Wakefield arranged a $30.5 million loan from Rialto Capital Management as part of the transaction.

 

Source: Connect Media

Healthcare Real Estate Developers Are Adapting To A Changing Landscape

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Anyone who has kept an eye on the healthcare real estate sector over the past several years is aware of the property type’s reliability amidst increasing economic uncertainty, which has resulted in growing interest among investors.

However, for what has become one of the hottest investment sectors in recent years, transformations underway within the healthcare industry will bring changes to the asset class over the next decade.

The market fundamentals are easy to understand. According to a recent report from Real Capital Analytics, United States-based healthcare real estate assets account for over $1 trillion in market value. Physician visits by baby boomers are expected to nearly double in the next decade; it is also projected that by 2060, one in four people will be over 65 years old. These factors make it clear that this already large market is positioned for continued growth.

However, in crowded regional healthcare markets like Philadelphia, which features several large competing healthcare systems and a variety of growing specialty networks, that growth will not just be more of the same.

Changes in Delivery

Traditionally, the American healthcare delivery model centered on hospitals, which meant that medical office buildings tended to be clustered near hospitals and other large inpatient medical facilities. These facilities were easy for doctors to access and provided enhanced services close to individuals’ primary points of care.

In recent years, the healthcare delivery model has undergone a dramatic shift, with outpatient and ambulatory facilities becoming primary points of care. This trend has unfolded almost simultaneously with the wave of consolidations and mergers that has swept through the industry in the last decade.

Working in tandem, these two trends have created a healthcare industry that is dominated by large healthcare systems searching for enhanced geographical footprints to better and more conveniently meet the health and wellness needs of the populations and communities they serve.

Key User Demands

Real estate plays a key role in a healthcare system’s ability to make quality care more accessible. As such, the demand for well-located, quality space continues to rise, attracting a greater number of investors than in prior years

Although location still plays a vital role in healthcare real estate investment, the criteria behind what makes a location desirable has shifted. Since medical buildings no longer need to be immediately proximate to hospitals, today’s best locations are those where people already are living, shopping and working. Whether this comes in the form of a purpose-built medical office building in the heart of a growing community or a retail location next to popular cafés and shopping destinations, today’s healthcare consumers prioritize convenience above all else.

Visibility is also playing a larger role in site selection for new healthcare projects. Expanding networks want their names out in the market, and they want people to be aware of their presence in the local community. This “retailization” of healthcare is highlighted by many medical office tenants’ requirements for signage and high visibility in their search for space.

Flexibility is also a main factor in today’s marketplace. Physician groups and healthcare systems require spaces that can accommodate the shifts in how care is delivered while also provide the flexibility to cater to telemedicine and other technologies that are transforming how people access care.

Project Example

Just outside of Philadelphia in Washington Township, New Jersey, the 35-acre Washington Square Town Center development addresses all of the factors discussed above.. With an increasingly cross-generational population and changing delivery model, medical space was a key component to the mixed-use project.

Working closely with Rothman Orthopaedic Institute, one of the region’s largest independent orthopaedic practices, a 40,000-square-foot, state-of-the-art medical office building was created at the gateway to the community that includes multifamily housing and retail options.

The healthcare trend has even been extended to the project’s residential component, with a 110-bed assisted living facility currently under construction to join the 330 residential apartments and 100 townhomes on the property. Today, the Rothman Medical Building stands fully occupied, and the retail component has seen tremendous interest from both medical and traditional retail tenants.

Not only do projects like the Washington Square Town Center allow the community to enjoy increased access to diverse medical services in a variety of settings, they also provide growing regional networks with a highly visible footprint in new communities to foster their continued growth.

Looking to the next decade, the healthcare real estate industry is positioned for tremendous growth. Leading this growth will be the developers and investors who truly understand the needs of an increasingly consolidated healthcare industry and can creatively imagine projects to meet both its short- and long-term needs.

 

Source: REBusiness Online