How Healthcare Adds Value To Mixed-Use Developments

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When it comes to location identification for development, you have to think creatively. In a highly competitive market like Milwaukee, mixed-use projects offer a great opportunity to showcase creativity, take advantage of complementary uses and drive tremendous value for clients and investors.

The success of a mixed-use project lies in location. A high-profile location will help attract businesses, which then helps build traffic. Ideally, you want to think outside the box to generate repeat visits with businesses that will help sustain that traffic. An innovative mix of retail, restaurant, hospitality, office and even healthcare can greatly enhance a development.

Mixed-use retail developments create new opportunities for healthcare projects. Health systems and physician practices are choosing to prioritize locations they may not have previously considered. There’s been a significant expansion of and increased focus on the outpatient ambulatory environment. The trend of developing specialty outpatient facilities, ambulatory surgery centers and micro-hospitals continues to gain momentum and allows for expansion to remain competitive while maintaining efficiency.

An outpatient facility brings traffic. Finding a high-visibility location where customers are already engaging increases the convenience factor. Built-in traffic drivers like restaurants and retail help with trip assurance. For example, after wrapping up a clinic appointment, you can stop for food, or pick up something at a retail store. Zeroing in on what the consumer wants and then making it easy for them to achieve that is the key to success. 

Case study: ProHealth Care 

ProHealth Care, a community-based healthcare system in Waukesha County in southeastern Wisconsin, approached Irgens for a new project in the Milwaukee suburb of Brookfield. ProHealth Care offers a full range of services from primary care and specialty care, hospital care, rehabilitation care, home and hospice care to fitness and wellness services. The company had a previously under-performing site, and after learning more about the goals for this new development, Irgens presented them with an alternate opportunity at The Corridor.

The Corridor is a 66-acre, horizontal mixed-use project that includes retail, restaurants, hospitality, healthcare, office and fitness and wellness space. The location offers great visibility from I-94 in a heavily trafficked area in Brookfield. 

Irgens brought this project to ProHealth to help reposition its services from a lower profile and less-valuable location to a highly sought-after retail corridor in a richly developed demographic market. The strategically important location made sense, and ProHealth Care took advantage of the opportunity. The Corridor offered a high-profile site with multiple access points. A number of growing and first-to-market businesses chose to locate there, including Dick’s Sporting Goods, Portillo’s and Life Time Fitness.

Irgens moved quickly on the 50,000-square-foot building for ProHealth Medical Group at The Corridor. Immediately following lease signing, Irgens completed the building design and expedited the entitlement process to bring the project to occupancy within 11 months. Securing the site and getting ProHealth to market quickly gave the company a competitive advantage.

Consumers expect to find healthcare delivered in a more convenient location. If it’s not convenient, consumers will not engage because they make decisions based on ease. Health systems are beginning to understand this. 

Successful healthcare development through strategic and trusted relationships will serve companies well. Irgens has developed several projects with ProHealth Care over the years. Trust was an important factor in having ProHealth Care consider the opportunity at The Corridor and immediately recognize its value.

Successful real estate developments are close to where people live, work and play. Proximity to mass transit and other amenities like grocery and retail stores are key factors to that success. Healthcare plays into this as well, becoming another key element for a quality mixed-use development, positioning an organization in a new area to create a new avenue for care delivery in a convenient, consumer-oriented setting.

 

Source:  RE Business

Medical Concierges, Telehealth, Experience Define Healthcare Real Estate’s Brand-New World

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Around the country, the ways consumers choose to access healthcare is undergoing a seismic shift. And those changes are affecting the locations health providers choose, the space they need and the ways they want to build it.

Patients across all demographics are leaning toward easily accessible, convenient healthcare systems and starting to warm to things like telehealth and digital offerings. Meanwhile, advances in technology are happening at a rapid clip, changing the way healthcare providers now practice medicine and casting uncertainty on how it will be done in the future.

“We really don’t know what these buildings are going to be and look like 10 years from now,” Gilbane Building Co. Vice President Peter Mulcahey said at Bisnow’s National Healthcare East event Wednesday.

“I think, if we all sat here 10 years ago and said, ‘Most of the medicine we want to deliver is through iPad interface and we only want to do critical services within four walls’ …. the reality hadn’t quite set in, otherwise we would have been prepared for where we are right now.”

Medical facility designers could be forgiven for their lack of foresight: The iPad was only announced eight years ago, and back then there were broad questions about whether Steve Jobs’ latest invention had any practical use at all.

As healthcare delivery evolves and more outpatient facilities are developed, Mulcahey said, there needs to be a focus on making sure structures are built to allow for flexibility down the road.

That may mean including more square footage in new or redesigned buildings, he said, to make way for repurposing as needed.

Others said changes to the way hospital services are provided are looming. Just as retail has morphed from physical stores to online, developments in technology will increasingly take healthcare into people’s homes.

“For those whose livelihoods depend on bricks-and-mortar of hospitals, sorry to disappoint you, but the hospital room of the future is likely to be the bedrooms of people across the country,” Partners Continuing Care and Spaulding Rehabilitation Network President David Storto said. “Imagine, for those of you who remember, [1970s TV doctor] Marcus Welby with all the technology that is available today.”

Panelists said treating patients remotely is fast becoming a key element to healthcare. Children’s National Health System in D.C. has been working in telemedicine for two decades, for example, and New York-Presbyterian is one of the largest telehealth providers in the country, according to Chief Strategy Officer Emme Deland.

Still, Deland said, even though telehealth is crucial to supporting patients, the healthcare industry needs to start preparing inpatient facilities for the aging population.

“We’ve done an analysis of what is going to happen over the next 10 years,” Deland told the audience. “If you take into consideration the technology and the population … We will see a slight decrease in the number of discharges, but we will see an increase in the number of patient days because people will be sicker and hospitalized. So we do need to have our inpatient facility [and] we do need to figure out our additional intensive care space.”

These changes are all playing out in healthcare providers’ search for locations, and the type of space they choose.

“You are seeing [a] greater number of practitioners in one space, more one-stop shops, so providing many services under one roof,” said broker Paul Wexler, the head of the Wexler Healthcare Properties Team at Corcoran, who added easy-to-access locations are in high demand.

He and his team recently arranged for a 17K SF outpatient center to go into a former movie theater at 1210 Second Ave. and for a 5K SF obstetrician and gynecologist clinic at 260 East 62nd St., he said.

“As much as retailers are trying to create that experience … healthcare providers are recognizing the same need to create the same experience,” he said. “Everything from the fast and efficient way they move people through the office to the overall experience of checking in and out.”

Mount Sinai Health Real Estate Division Vice President Tom Ahn agreed that type of one-stop shopping option — where you can see a primary care doctor, have blood drawn and get an MRI done in one place — is a major part of his hospital’s expansion.

Earlier this year, Mount Sinai announced a plan to build an 18K SF health center at 55 Hudson Yards, which will serve the companies with offices at the megaproject and the residents who live in the high-end condominiums and rentals there. Ahn said that location will be unique in that it will be a “concierge” health service, which is a path many providers are now taking.

Ultimately, he said, it is about standing out to patients and consumers.

“If we are not convenient and in a good location, providing all those services, we aren’t going to be competitive,” he said. “So that’s an important piece of our strategy, and that’s an important part of a lot of institutions’ strategy right now.”

While carving out that strategy, both in terms of location and service, in the shifting healthcare environment is imperative, panelists said patients will still seek out doctors and practitioners they feel they can trust.

“So [healthcare] is going to be less physical and more digital … A 25-year-old should be using 90% of his healthcare digitally… [for a] 45-year-old that will change, a 65-year-old will use 50% digital,” CityMD CEO Dr. Richard Park said. “AI, technology, that’s all important and needed. But humanity — that is the missing piece of healthcare.”

 

Source:  Bisnow

Healthcare REITs Signal An Increased Focus On Medical Office

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It is earnings season, which means real estate companies are diligently releasing their earnings and analysts are intently scrutinizing said reports. Mizuho REITs analyst Richard Anderson covers healthcare REITs and he noticed a trend among the big 3 companies HCP, Welltower and Ventas in their recent releases: they all are emphasizing strategies involving medical office buildings.

To be sure, MOB is a staple among their holdings but as Anderson tells GlobeSt.com, “it just seemed interesting that each of the three highlighted a very specific strategy aimed at approaching the medical office business to some degree, versus past earnings reports.”

He says that:

  • HCP made mention of its joint venture with Morgan Stanley that’s aimed at investing in medical office as well as a new partnership with HCA to focus on the asset class.
  • Welltower is expected to close about $500 million of MOB transactions in the short term. “Also, they have always talked about using their senior housing portfolio as a quasi hanging carrot for medical office, as a medical office feeder.” The REIT has also brought on board a former Duke Realty executive Keith Knokoli, who has strong credentials in the MOB segment. “You don’t make an investment at that level of executive if you’re not serious about the business.”
  • Ventas is re-igniting its exclusivity arrangement with PMB Real Estate Services. It is a medical office developer that Ventas inherited when it merged with Nationwide Health Properties many years ago, Anderson explains. Ventas just re-upped its exclusivity arrangement with the company for the next ten years, he says.

A Lower Risk Profile

What is strange, he says is that “cap rates on medical office assets that are trading hands are still quite low, but nonetheless REITs are maintaining a fair amount of attention toward the space.” Anderson also points out that medical office assets are known for their stability and relatively lackluster growth while skilled nursing is a higher returning asset class that comes with higher risk.

His tentative takeaway: there is possibly a return to risk-off mentality around the corner for healthcare REITs. “Maybe REITs are becoming buyers of medical offices simply because of their low risk orientation, even though the asset class remains quite expensive.”

 

Source:  GlobeSt.