Blending Healthcare And Hospitality To Thrive In The Post-COVID-19 Medical Landscape

A new project in Flushing, New York, is slated for delivery in late 2021 and set to become a landmark for top-quality healthcare in the area.

The Eastern Mirage Medical Center, connected to the five-star Eastern Mirage Hotel, will help satisfy increased patient demand for state-of-the-art medical facilities, propelling the associated practices and medical institutions to enhance business growth.

This medical center represents the outcome of more than ten years of design and planning and incorporates the most advanced technology available to hospitals today — critical selling points considering the pressure physicians face in attracting and retaining high-income patients after a tumultuous year.

According to the developer, Fleet Financial Group’s Richard Xia, the concept of the Eastern Mirage Medical Center reveals the symbiotic relationship potential for medical offices and hospitality, creating a steady flow of travelers for the hotel as well as a more welcoming, hospitality-inspired setting for the medical office itself.

“Patients have raised the bar for their medical experiences,” said Xia. “Physicians and healthcare institutions that attune themselves to those needs and successfully blend hospitality and healthcare will remove barriers to growing their practice and find themselves in great demand.”

Here are three factors guiding the development of the Eastern Mirage Medical Center that every healthcare operation must take into account in order to remain competitive:

High-Tech Features That Support Patient Comfort And Connection 

A modern and futuristic medical environment reassures patients they’re in good hands and inspires confidence they’ve secured the top physicians in the field. However, few legacy buildings in the healthcare space can support truly high-tech renovations, and those that do cannot do so seamlessly.

High-tech features refer to much more than the latest computers and software. With truly integrated healthcare and hospitality, the building itself becomes a conductor of convenience, applying technology to the patient experience to make sure it is seamless, efficient, and comfortable.

The first example that came to mind for Xia was the Eastern Mirage Medical Center’s direct fiber optic connection, which enables lightning-fast data transmission between practitioners in the medical center and patients in the hotel as well as between practitioners themselves.

“With so many physicians shifting their patient data to the cloud, Internet speed and security has become a fundamental component of success,” explained Xia. “Faster and higher-quality connection and imaging means doctors can make a better assessment of their patient and deliver a more responsive, connected patient experience.”

At the Eastern Mirage Medical Center, integrated high-tech features include:

•5G Fiber optics directly wired into each office and connected to the hotel, offering physicians a high-speed, non-interrupted network connection from medical office to suite

• Facial and voice recognition security features for offices and elevators to create an almost completely touchless patient experience

• Full-capacity BMS system which offers unparalleled oversight and control over HVAC system, indoor air quality, and pressure

Human-Centric Amenities And Aesthetically Pleasing Design

Many physicians are surprised to learn that amenities can be a larger factor in driving traffic to hospitals than clinical quality. In fact, the design of a hospital and recovery environment can have a significant impact on everything related to patient recovery, including patient satisfaction, costs, infection, and outcomes —which is why there’s so much demand among patients for human-centric and aesthetically-pleasing hospital design.

The design of the Eastern Mirage Medical Center takes this research into account, ensuring doctors can provide their patients with a beautiful, modern, and relaxing building that inspires patient confidence. Modern medical centers like this take the work out of providing a flawless patient experience, with every detail thought-out in advance: stunning views, quiet solitude in the midst of a bustling city, and thoughtful, healthful food and dining experiences all in one space.

“We see beautiful architecture, design, and amenities directly contribute to the quality of medical services,” said Xia. “This gives patients the best possible experience while allowing doctors to justify the premium charges associated with their high-quality services and grow the prestige of their practices.”

A few of the architectural and design traits of the Eastern Mirage Medical Center include the following:

• Five-layer panoramic glass curtain wall with heat insulation, sound absorption (-51db) and light transmission to provide a gorgeous view of the city and very little noise pollution despite its convenient location near the LaGuardia Airport (LGA)

• Architecturally the tallest building in downtown Flushing, further distinguished by its striking glass curtain wall and high ceiling height ranging from 11ft to 14ft

• Safe and nontoxic recycling of environmentally friendly building materials, including Turkish marble whole-stone floor and Portugal limestone sinks

World-Class Hospitality, Comfort, And Privacy For High-Income Patients 

For physicians that serve high-income patients, the quality of the appointment, procedure, recovery, and visiting experiences is of utmost importance. But it’s almost impossible to meet those standards as a stand-alone or individual practice in a legacy or refurbished building — your discerning patients will never feel quite at home.

A luxury medical and recovery experience like the one at the Eastern Mirage Medical Center removes all of those barriers. Physicians plug-and-play their practices into an ecosystem of world-class hospitality, comfort, and privacy, without having to plan or develop it themselves.

“It’s very difficult to replicate a high-income patient’s high-end lifestyle away from home, but we’ve done it here,” said Xia. “The Eastern Mirage Medical Center allows medical professionals to offer their patients a private, restful place to recover from their appointments and procedures, with all the comforts of home and convenience of a world-class hotel.”

At the Eastern Mirage Medical Center, world-class hospitality and privacy features include:

• More than 300 private underground parking spaces and 4 barrier-free elevators to enhance the door-to-door service experience

•  Medical offices integrated with a self-operated, high-end hotel and Michelin-starred restaurant

• Unbeatable dining, entertainment, and leisure components including an above-ground fish tank pool and hotel-affiliated medical spa

• Over 34,000 SF of well-designed multifunction green outdoor space with privacy protection throughout the entire building

Secure A Place In The Future Of Healthcare

A new generation of technology is available to medical care providers, and a new generation of patients wants access to it. Physicians and medical practices that want a place in the future of healthcare must secure a facility like the Eastern Mirage Medical Center that meets patients’ high standards for visual aesthetics, hospitality, technology, and medical care.

Learn About the Eastern Mirage Medical Center 

Are you interested in elevating the quality and luxury of your patient experience? Call Compass Commercial at 844-896-9210 (toll-free), or click here to learn more about the Eastern Mirage Medical Center.

 

Source: Fierce Healthcare

Healthcare Real Estate Well-Positioned For Continued Growth In Post-COVID World

The COVID-19 health crisis had a greater impact on demand for commercial real estate than the Great Recession, as mandatory quarantines, social distancing, shutdowns, supply chain disruptions, unemployment and an erosion of consumer confidence brought the industry to its knees in 2020 and through the first quarter 2021.

One bright spot in the troubled commercial real estate sector has been healthcare real estate.  While office visits for elective procedures plummeted, critical care, particularly off-campus, saw a surge as a result of the pandemic, balancing any weaknesses in the sector.

The U.S. Medical Office (MOB) vacancy rate was 8.6% as of Q4 2020, up from 7.8% at the end of 2019. In comparison, the overall office sector vacancy rate was 13.2% as of Q4 2020, sales volumes have held up extremely well, and real estate investors remain very bullish on the sector.

“The healthcare sector continues to play a dominant role in the US economy and has displayed year-on-year growth for many decades,” notes Martin Freeman, CEO of OrbVest, a global real estate company that invests in US income producing medical commercial real estate.  “From an economic and political perspective, the new Biden administration is strongly in favor of expanding healthcare services and benefits and we remain bullish on the sector going forward.”

Expectations for continued outperformance in the healthcare real estate sector is buoyed by some of the following fundamentals.

1. Structural Growth In Medical Office Demand Will Include, But Not Be Limited To Telehealth

Investors in healthcare real estate have to consider the impact of health-driven changes, economic-driven changes, and strategic-driven changes. Telehealth will be a great driver of healthcare real estate growth and be complementary rather than competitive. Take telehealth giant Teladoc’s merger with chronic disease manager Livongo, for example.

Social distancing, whether popular or not, will be a growth driver for structural and spatial improvements in medical office buildings, as consumers and staff will require modifications to feel safe.  Economically, capital preservation will impact real estate, and strategically, workforce deployment could be impacted. There could be some short-term disruption as we figure out how to take what worked with the “old normal” and integrate with the “new normal.” We should not be surprised to see limited capacities, rent relief or deferment, headcount reductions based on deferred procedures, and more.

However, long-term, as the sector will inevitably adapt and adjust, and healthcare real estate should have solid long-term growth potential because of shifting consumer needs and evolving demographics.

Medical Office Demand(Source: JLL)

2. Increased Real Estate Demand From The Segmentation Of Wellness And Acute Care Locations

“We are seeing a measurable shift from the hospital as the center of American healthcare,” explains Freeman, “this trend is likely to continue and accelerate in future years.”

This is another tailwind for healthcare real estate partially driven by demographics. The need for preventive and personalized care among millennials and seniors was already reshaping healthcare real estate long before the pandemic. We already discussed how America’s aging demographics appear to directly correlate with increased real estate demand for health services. Providers also understand that both millennials and seniors value preventive and personalized care. They know that these cohorts want to focus on leading a long and healthy life for themselves and their families. Plus, seniors now have access to less expensive and convenient care, while young working millennial parents have access to quicker and specialized care for their children. This has been working too well for it not to increase.

However, this trend is not exclusive to demographic shifts. Many of these triggers are due to rising hospital volume and how complicated they can be to navigate. Convenient access coupled with lifestyle integration look like a key driver. Hospitals will likely focus on higher acuity in-patient care over the long-term, opening up a need for additional real estate dedicated to lower-acuity, lower-cost facilities in more convenient and easily accessible locations in population centers.

Plus, with a brighter spotlight being shone on preexisting conditions, wellness and preventive care needs have never been higher. From a real estate standpoint, future outperformance will likely involve a combination of the following.

• Increased efficiency of outpatient facilities.

This can be considered a “medical home” model. This can include grouping primary care and specialty care in consolidated locations accompanying services such as imaging, pharmacy, and laboratories. This would also potentially require larger buildings with more giant footprints. The most significant providers have increasingly adopted this model already.

• The rise of “MedTail”

Retail and health real estate both share many commonalities, such as the need for high traffic, visibility, neighborhood proximity, and parking access. Shopping center availability and affordability are on the rise, and healthcare tenants may jump at the opportunity to increasingly relocate within retail centers.

This has given rise to a new segment of commercial real estate- “MedTail.” Retail locations with integrated healthcare options, such as drugstores are becoming increasingly prevalent.

According to healthcare real estate firm HBRE, small towns and suburban areas that once had little access to local medical facilities are seeing more options such as the CVS minute clinic or Kroger’s Little Clinic. Plus, urgent care centers have been popping up in retail strip malls as another offering to suburban residents.

Tether Advisors also performed a study and found that “nearly 80 percent of private equity, commercial real estate and retail healthcare respondents believe medtail investment will increase in the coming year and that COVID-19 bolstered the sector’s outlook.”

• Maximize revenue opportunities on a single site

Operators can maximize multiple revenue streams, such as promoting flexibility for different care delivery types at other times. Providers are also more willing to outsource facilities and project management services in strategic partnerships to ensure that they obtain the highest possible value from their real estate.

This could also create a significant real estate opening due to adjustments hospitals will have to make. COVID-19 increased the need for higher-acuity space within hospitals and pushed lower-acuity and administrative uses into alternative locations. This altered the functional mix of hospitals and heightened a public perception that hospitals are for very sick people. Many short- and long-term approaches affecting medical real estate should be seen here.

Hospitals will inevitably have to optimize their existing real estate and reduce the potential for contamination by modifying existing spaces and consolidating. They will also have to embrace higher-acuity care while managing contagion risk- even once the pandemic becomes more manageable.  Future success for hospitals will also involve embracing the shift to higher-acuity care and easing safety concerns within hospital facilities.

3. Medical Office Investments Are A Source Of Stability Pre-Pandemic, Mid-Pandemic, And Post-Pandemic

The numbers don’t lie. Medical office buildings (MOBs) are loved by passive investors because of long-term leases, stable occupancy, consistent income streams, and tenant quality. This asset class has many tailwinds blowing in its favor for both the short-term and long-term.

First and foremost, these properties greatly benefited from all of the aid in the multiple stimulus packages and the trillions dedicated to helping small businesses. Think of all the independent physicians and small practices that have benefited from the PPP loans. While many tenants struggled to pay rent, most of these medical tenants were absolutely fine. Loans from the federal government required hospitals to maintain staffing levels and continue to pay rent on their buildings, and as a result relatively few organizations had trouble making rent. In fact, in the worst part of the pandemic, medical office space owners collected rent from tenants in the high 90 percent range. As a result of the relatively low amount of rent deferrals, there’s a strong long-term outlook for healthcare real estate.

Consider MOB fundamentals and occupancy rates too. Across approximately 1.5 billion square feet in the United States, MOB occupancy has been remarkably stable. Between the financial crisis and now, MOB occupancy has fluctuated between 91.4 percent and 92.6 percent. Compare that to the average occupancy rate for offices in the U.S. in that same period- roughly 82.1 percent to 85.8 percent.

Medical Office Building OccupancyOr maybe you want to consider tenant retention. Because of the high investment in infrastructure required by medical tenants and barriers to entry such as regulations needed for surgery centers and imaging, MOBs on average report an average retention rate in the high 80 percent range, significantly surpassing typical commercial office retention.

Plus, despite all of the economic headwinds and the downturn in commercial real estate, new outpatient medical space construction has remained consistently stable at around 17 to 20 million square feet a year, roughly 1.8 percent of inventory nationally, and well below the national average of 2.1 percent for commercial office.

There is also virtually no speculative medical office development either, with most developers and lenders alike demanding pre-leasing of 50 percent to launch new construction.

Look at how medical rent growths have grown too. Nationally, the average medical office net rents steadily rose from $18.28 per square foot in 2012 to $21.51 in early 2020. This is a stable 1.5 percent year-over-year gain and 31.8 percent peak-to-trough return from the low of $16.32 in the fourth quarter of 2008.

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Key Takeaway for Investors

Can healthcare real estate weather the commercial market’s downturn?  The answer is a resounding yes.

“The current challenges faced by the global economy, and the potentially aggressive rebound in business sentiment in the US, creates an ideal opportunity for companies like OrbVest to assist investors from around the world to invest directly into medical real estate in the US and grow their wealth consistently and sustainably,” says Freeman.

Healthcare is changing, our demographics are aging, and if this past year showed us anything, it’s that an adaptable and forward-thinking health system is vital to a functional society. We will see numerous shifts in healthcare real estate and MOBs in the short-term and long-term. But the bottom line is that if you look at the fundamentals, you really cannot find a better long-term investment than healthcare real estate for stable income streams, quality tenants, long-term leases, and high occupancy rates.

If you look at investor activity since the financial crisis, this supports the sector’s fundamentals. This is a durable asset class, changing with the times, and a property type that will experience growth far into the future. If you are looking for passive income in real estate, healthcare commercial real estate offers an extraordinary investment opportunity.

 

Source: NuWire Investors

Medical City Frisco’s Newest Addition

Medical City Frisco plans to build a $91 million patient building that will add 36 patient care beds to the hospital.

The building will add 118,481 square feet to the facility, bringing the facility’s total bed count to 97. It will have an entrance on Frisco’s Main Street and is being constructed to allow for natural light and include comfortable furnishings, large patient rooms, a spacious waiting area, and 300 parking spaces. Construction is scheduled to be completed in December 2022.

The development is part of Medical City Healthcare’s five-year, $1.1 billion investment in expanding hospitals, adding service lines, building new facilities, and advancing technology systemwide. It comes on the heels of another recent renovation at its Frisco hospital.

Prior to the pandemic, Medical City Healthcare’s  Frisco hospital saw 3,900 admissions and 15,000 emergency room visits. The hospital now has 11 operating rooms, a biplane cardiac catheterization lab, 61 patient rooms, and office space, following the completion of a $54 million, 150,000 square-foot medical office building that opened in June.

The hospital’s growth has mirrored the larger community. Over the last 10 years, Frisco has grown over 70 percent, outpacing any other city in the nation. The city’s population is more than 200,000 people in 2020, an increase from the roughly 117,000 people reported in 2010. It has been ranked America’s fastest growing city and No. 1 in job growth at different points throughout the last decade.

Most of the major health systems have built hospitals along the Dallas North Tollway in Frisco, including Texas Health, Baylor Scott & White, Scottish Rite, Children’s Health, Cook Children’s, and UT Southwestern.

We are proud to be part of, and continue to invest in, the Frisco community, which continues to grow at a phenomenal pace,” said Patrick Rohan, CEO of Medical City Frisco via release. “Anticipating future community needs helps keep our neighbors healthy and advances our mission to the care and improvement of human life.”

Source: D Magazine