An Overview Of The Medical Office Market

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The average asking rent for medical offices reached the highest level on record in the second quarter of 2018, rising 1.4 percent year-over-year to $22.90 per sq. ft., according to a late December report from CBRE.

The firm pointed to tight market conditions and the completion of new, high-quality space as reasons for the continued rent increases.

“Rents increased in two-thirds of the markets tracked by CBRE and grew fastest in some of the markets with the lowest vacancy rates, including Nashville, Manhattan, Louisville, Seattle, and Indianapolis,” Andrea Cross, Americas head of office research, CBRE, said in a statement.

Another factor is that health systems are increasingly using lower-cost outpatient centers. These facilities enable health systems to provide services closer to where patients live. According to CBRE, the total number of outpatient centers grew by more than 50 percent to approximately 41,000 from 2005 to 2016. In addition, outpatient center employment has more than doubled since 2003, and grew 3.5 percent year-over-year in October 2018, compared with 2 percent annual growth in overall healthcare employment.

“Healthcare systems are increasingly catering to patients as consumers—rather than simply users—of healthcare services,” Mark Lamp, executive managing director, healthcare, CBRE, said in a statement. “They are creating outpatient facilities that provide a more ‘hotel-like’ experience—and at a lower cost than the more expensive hospital services—with technology-enabled check-in, abundant natural light and incorporated outdoor spaces, and patient care concierges trained to support guests with any needs.”

On the development front, CBRE‘s report concluded that medical office development strongly correlates with population growth, with Phoenix, Houston, Dallas/Ft. Worth and Atlanta among the top markets for total completions from the third quarter of 2017 to the second quarter of 2018, along with Minneapolis/St. Paul, a leading healthcare cluster. Houston, Minneapolis/St. Paul, Atlanta, Chicago, the Inland Empire, Kansas City and Boston rank among the top markets for square footage under construction.

Click here to view NREI’s ‘An Overview Of The Medical Office Market Slideshow’. This gallery takes a look at the fundamentals in the top 30 markets ranked by vacancy rates as of the second quarter of 2018, but also includes stats on net absorption, asking rents and the amount of space under construction in each market.

 

Source: NREI

2019 Forecast For New Research Labs: Construction Innovations Help Accelerate Scientific Discoveries

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Researchers and other scientists who have access to high-performance research laboratories are pioneering breakthrough discoveries in medicine, science and biotechnology.

From the medical solutions that are the hallmark of Washington University to the vital research that will take place at the National Bio and Agro-Defense Facility (NBAF) in Manhattan, Kansas, sophisticated lab environments support the region’s research-driven enterprises.

Experts in the design and construction of lab spaces believe several factors are shaping the next phase of research environments in 2019 and beyond. Each trend supports the universal goals of accelerating innovation, attracting and retaining top talent, and bolstering an organization’s overall competitiveness.

McCarthy collaborates with world-class architectural and engineering partners in building the next generation of these advanced research facilities.

Innovative Visualization Streamlines Construction

The desire to bring new research space online as quickly as possible is driving a shift toward fast-track construction schedules.

Virtual design and construction technologies streamline the construction process and enable the offsite prefabrication of many building components — from exterior drywall or curtainwall systems to equipment racks, piping, ductwork and electrical conduit.

“Prefabrication helps us save time and optimize quality by assembling components in a controlled offsite environment vs. building them in the field,” says McCarthy Project Director Seth Kelso, who oversees construction of the NBAF project.

Visualization tools such as 3D modeling and virtual and augmented reality allow future users of a space to realistically experience it — and give valuable feedback to improve it — at an early stage when modifications can be made with minimal impact to the budget or schedule.

“It may be difficult for some users to understand two-dimensional drawings or even a 3D model, but with VR and AR, they can put on goggles and be immediately transported inside a space that we’ve modeled,” says Kelso.

In recent years, there’s been an evolution from the traditional design-bid-build method of construction to design-build and other methods where the construction manager is brought onboard at the same time or shortly after an architect is selected.

“I fully support bringing in the construction team as early as possible,” says Josh Meyer, managing principal at Jacobs Engineering. Under his leadership, Jacobs has been involved in more than 300 lab buildings totaling over 50 million square feet. I’m asked by clients all the time how much projects are going to cost, but I’m not a cost estimator. The earlier you bring in people that really understand construction costs and local market conditions, the better.”

Protecting The Health And Safety Of Researchers

Safety is a top priority within every lab environment, but it’s especially vital for public health labs that conduct research related to infectious diseases, biological agents and other sensitive areas.

“Building these high-containment research labs and vivarium spaces like those at NBAF requires specialized equipment and precise construction techniques, with very stringent requirements and no tolerance for deficiencies,” says Kelso.

Located within the Kansas City Animal Health Corridor, the state-of-the-art NBAF facility will study diseases that threaten both America’s animal agricultural industry and public health. To be operated by the U.S. Department of Homeland Security, it will be the only U.S. lab for large animals constructed to meet biosafety level 4 (BSL-4) — the highest containment level established by the Centers for Disease Control and Prevention.

“The NBAF facility is the only lab of its kind at that scale and complexity and, like most U.S. public health labs, it will be the best in the world,” says Daniel Watch, science and technology practice leader at Perkins+Will, the project’s lead architect.

Promoting Team-Based Research

A new era of team-based research has ushered in the need for flexible spaces with advanced technology to facilitate ongoing collaboration among colleagues who may be located down the hall or halfway around the world.

“Today’s organizations are thoughtful about setting up research teams that integrate people from a wide range of backgrounds and locations,” says Watch. “A researcher in St. Louis might be connected to a team in Jeddah, Saudi Arabia, or Beijing, China.”

A growing number of institutions are also building lab environments to accommodate unique collaborations with external partners.

“I’m seeing a lot more maker space, accelerator space and other innovation space that brings in partners from industry, which is exciting,” says Meyer. “If researchers can go from their lab to innovation space that’s really close — either in the same building or nearby on campus — it can help drive innovation.”

Because of the digital transformation of the R&D process, traditional “wet labs” are shrinking while flex space and office areas for computational science are growing. Smaller, more sophisticated lab and medical imaging equipment can be stacked and tied into the technology infrastructure to support data analysis within a compact footprint.

“With the number of high-quality projects that have come online within the last several years, it’s much harder to recruit and retain people in substandard space,” Meyer says. “The competition is fierce and it’s one of the biggest reasons we’re seeing an uptick in the number of new research facilities for institutional clients.”

Just as close collaboration drives successful research, it’s also a key component in the construction of new research facilities.

“Lab projects require ongoing collaboration between design and construction teams, together with the client, to align and achieve project goals,” says Kelso.

 

Source: St. Louis Biz Journal

2019 Healthcare Facility Design Trend Predictions

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Healthcare Design is an ever-evolving topic as systems must continuously adapt to meet complex regulations, reduce operating expenses, integrate emerging technologies, keep up with the quickly changing, consumer-driven landscape, and deliver world-class care to their communities.

E4H Environments for Health Architecture, partners closely with health systems to develop an approach to these diverse challenges. The following is a list of national design trends that the firm developed that will impact the healthcare design industry in 2019.

Designing for Resiliency 

Healthcare facilities function 24/7 which requires them to be sustainably designed in order to maximize resources and reduce energy use/costs. With global warming’s effects quickly shifting the dynamics of our geography, the need for resiliency has made its way to the forefront of design discussions. How will the physical facility perform in the face of a natural or man-made disaster? What is the role of a hospital building to provide shelter and care to a community ravaged by a hurricane, flooding or wildfires? Can our buildings continue to function when all the municipal systems (water, power, sanitary services) around them are compromised? What protects the safety of patients and staff when there’s an active shooter on the premises?

These questions help us think beyond the standard disaster-preparedness drills to ensure the designs we develop thoughtfully address the needs of patients, staff, and their community in a time of unprecedented stress. New operational protocols require new plans, different physical barriers, and an innovative approach to the use of materials. Many E4H projects have been impacted by natural disasters such as Hurricane Sandy, this year’s Hurricane Michael in Florida, and the 7.0 Magnitude Earthquake in Alaska.

The Expanding Role of Genomics in Healthcare 

Genomic research is impacting many fields of medical research and is emerging as a key disruptor in healthcare delivery and patient treatment. With rapid technological advances and decreasing costs associated with DNA sequencing, a more accessible diagnostic tool, genomic research has provided a new lens into difficult-to-diagnose and rare diseases

Additionally, Polymerase Chain Reaction (PCR), a mature molecular technology, is being refined through improved techniques, new assays, and much higher throughput capabilities than ever before. We are seeing more molecular testing being done in the clinical lab, with many hospitals creating entirely new Molecular Pathology departments. This genomic data is opening the doors to greater predictability of drug efficacy, an increase in personalized medicine and targeted therapies, resulting in improved patient outcomes. E4H clients such as the Dana Farber Cancer Institute are at the frontier of translational medicine in healthcare.

AI and Virtual Healthcare 

Healthcare delivery has spent the last decades working to transform a process that is heavily dependent on data, and make it work smarter. Hospitals and health systems have been working hard to convert and optimize their databases to improve patient care and streamline processes. Artificial Intelligence is now poised to become the next evolution of healthcare data management, analysis and prediction.

The ability of AI to analyze data and predict outcomes and trends will have impacts not only in the clinical fields, but also operational and the physical environments. AI has already begun to demonstrate its ability to assist clinicians with diagnosis and prevention of medical errors. As this technology matures, it will have a profound impact both on care delivered at healthcare sites and in the virtual realm allowing for more informed diagnosis, smarter monitoring and alerts, and outcome predictions based on patient specific data. As facilities incorporate AI into their operations, it will allow them to look at the effect of the environment on patient, staff, and materials movements. Which will provide them with the opportunity to refine their operations through scheduling to enhance throughput and eliminate waste. This insight will help better inform changes to the physical environment to better suit their needs based on the data that they are able to extract about the flow of material and people within their walls.

AI will provide facilities with the ability to better predict their needs for supplies and deliveries such as medical supplies, food, linens, pharmaceuticals and energy based on patient scheduling. This will help facilities further reduce the costly footprint of onsite storage through better managed just-in-time deliveries.

Due to the growing need for patient data and medical records to be shared across a network of healthcare entities, blockchain integrations systems have seen a push in digital health as well. Blockchain has the potential to revolutionize healthcare by allowing the sharing and analysis of critical patient data in real time to improve quality of care. Blockchain also increases the ease of information sharing between healthcare providers and patient, thus making data much more secure which allows facilities to better manage their inter administration and IT workflows. It is vital for healthcare systems to become aware of the increased efficiency new technologies can quickly implement, for not only healthcare providers but for all end users alike.

Post-Surgery Accommodations 

Health systems are constantly looking for ways to decrease operating expenses. One popular method is to alleviate the real estate footprint. This can be accomplished by moving administrative staff and outpatient services to off campus locations. A newer, growing trend is to move recovering patients off site to a nearby location where transportation is provided to and from the hospital if need be. This model is a convenient option for the patient, caregiver and provider. This allows for the patient and their family to have a sense of privacy, improving the patient experience as well as the rate of recovery.

Memorial Sloan Kettering’s 75th Street Patient Residence accommodates patients with blood cancers and disorders as well as patients receiving a bone marrow transplant. The residence offers fully furnished apartments with on-site concierge services to assist with care coordination. Transportation to and from Memorial Hospital is available.

Wellness Integration 

With the healthcare industry shifting its focus to preventative, population health, wellness has gained significant momentum over the last several years. Wellness incorporates the entire body and all systems as why functional medicine is the science of health, focused on the person and restoring the body’s natural metabolic processes; where traditional medicine is focused on disease. Wellness is an integral part of delivering holistic healthcare.

As reimbursement continues to shift to a model that encourages preventative healthcare, we are seeing a shift in not only delivery of care but the physical aspects of the hospitals themselves. This growing trend can be seen in healthcare facilities across the country in the form of community gyms, yoga studios, and dietary kitchens fully loaded with cooking classes. This allows the health systems to make use of unused space, keep patients engaged and accountable for their healthcare by providing other interactions besides checkups and/or emergency situations. This shift provides an opportunity for the hospital to build relationships with the community. Many E4H clients offer nutritional services, full gyms, and community programs to promote wellness such as Covenant Health Lifestyle Centre in Lubbock,TX.

Boutique Medical Centers 

There are two primary factors driving the rise of boutique specialty care centers, or precision medicine, nation-wide. One, a new and unique generation of informed healthcare consumers who expect quality, convenience and customization for all their needs, the other an advancing platform of technologies permitting providers a greater range of services bundled at a single point of care.

Millennials prioritize the enrichment of their health, lifestyles and experiences. Their decisions are based off quick and convenient platforms such as Google reviews, Yelp, Zocdoc, and several others that allow consumers to select a facility based off reviews vs a physician referral. Millennials are quick to express unmet expectations which has caused the healthcare systems to expand their service offerings. This new generation responds more readily to a successfully branded, boutique environments of clinical care.

Convenience is a pillar of retail success which suggests that healthcare systems will have to pivot in order to thrive in this arena. Healthcare providers are trying to diversify, differentiate and deliver their product distinctly to stay competitive. Fortunately, advances in technology and flexible design, have afforded clinical providers the means to offer broader ranged and more complex services in a single exam or treatment room; services that may have previously necessitated multiple visits to multiple locations. E4H projects such as the Hospital for Special Surgery Orthopedic Center Of Excellence in Palm Beach, FL offer full diagnostics services, ambulatory surgery, rehabilitation, and sports performance programs in one location.

 

Source: PRWeb