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South Florida Is Changing, And So Is Healthcare Construction

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As people flock to South Florida, demand is rising for new construction in housing, transportation and healthcare.

But in the face of supply chain challenges, escalating prices and a tight labor market, experts in the field believe the success of new projects hinges more than ever on timely decisions and collaboration.

“There’s been a 180-degree shift over the past few years,” says Operations Manager Johnathan Peavy at Robins & Morton’s Miami office. “In the early days of the pandemic, supplies, material and even labor were readily available. We anticipated some supply chain issues due to the pandemic, but no one anticipated the ‘Texas Freeze,‘ which compounded the supply chain woes. Along with secondary shutdowns to heavy manufacturing markets, these have created a title wave of supply chain issues.”

Staggered factory shutdowns have left lingering backlogs of construction supplies, from electrical components to building materials. The problems are compounded by the ongoing supply chain issues and a very tight construction labor market, with cost escalations increasing budget volatility.

At Robins & Morton, supporting clients in a changing market is a top priority – and that process starts on day one with a commitment to transparency and collaboration.

“We want to be available to help every step of the way; not only in building, but in budgeting, scheduling, procurement and approval,” says Peavy. “Making smart choices about which materials to use and when to order them. Or helping the client plan for volatility in the market – for example, carrying over a percentage of the budget each month to be ready for inflation or price hikes.”

The firm’s collaborative approach serves as an essential strategy when the company faces uniquely challenging projects – such as rebuilding Baptist Health Fishermen’s Community Hospital in Marathon. That same strong communication is key to overcoming market challenges at Robins & Morton’s projects across South Florida, including Jupiter Medical Center’s Surgical Institute Expansion, BHSF Boca Raton Regional Hospital and University of Miami Health System.

“There’s no one-size-fits-all solution,” adds Senior Project Manager Edwige Clark. “It’s about looking at the data you have and trying to spot risks and potential pitfalls before they happen – but the more you can communicate, the more effective all parties can be. We’re navigating this together.”

Those close partnerships help futureproof healthcare facilities. Often, that starts with designs that can significantly reduce the environmental footprint and utility costs. For tropical and coastal environments like South Florida, structures need to withstand humid environments, heavy winds, and potential flooding, and hospitals must remain operational to serve patients during hurricanes or other natural disasters.

“At the end of the day, we’re doing more than meeting parameters. We’re building for people: for healthcare workers, for expecting parents, for folks recovering from illness or injury,” says Clark. “When the construction is finished; it’s in the choices we made that will impact those people for a long time.”

As flexibility in work and transportation allows people to move “where they want to live” and not only “where they need to live,” South Florida is a key destination. An influx of new residents will fuel growth and new developments, which will include healthcare facilities to serve the growing population.

“If so, South Florida will be ready,” says Peavy. “Over the next three to five years, it’s likely the region will continue to grow – and with it, the cycle of new construction. But we’re rising to meet that demand with strong partnerships, new talent and strategies that will help our clients adapt in the years ahead.”

 

Source: South Florida Hospital News

Real Estate Could Have A Role To Play In Alleviating Medical Staffing Squeeze

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Battered by the lingering pandemic, a rise in inflation, supply chain slowdowns and recessionary fears becoming reality, the healthcare industry has faced crisis after crisis over the past several years.

But it could be commercial real estate to the rescue, at least partially, to help solve one of the industry’s most longstanding, yet persistent problems: healthcare’s chronic staffing issues.

Healthcare experts at Bisnow’s Chicago Healthcare & Life Sciences Real Estate event Aug. 11 at Illinois Science + Technology Park said that though challenges to the industry are overt, real estate is poised to be a partner in helping healthcare reconsider how it uses space for patient care in the current market, especially in light of staffing shortages exacerbated by years of a punishing pandemic.

“A lot of what we see in healthcare real estate decisions is using the real estate in a way to leverage staffing issues,” Ryan Cos. Vice President of Development-Healthcare Curt Pascoe said. “CRE can help fill gaps by optimizing space, either consolidating locations or reconstructing locations in a way that allows you to eliminate a front desk person or eliminate a nursing position.”

Even before the pandemic, the nation suffered from a lack of skilled nurses and other healthcare workers. Then some 1.5 million healthcare jobs were lost in the first two months of the pandemic alone as clinics closed and U.S. hospitals restricted services. Most jobs have since returned, though healthcare employment remains 1.1% below pre-pandemic levels, according to Colliers’ 2022 Mid-Year Healthcare Outlook — many of them lost permanently to burnout.

Shawn Janus, national director of U.S. Healthcare Services at Colliers, said that while he has seen persistent staffing shortages throughout his past 20 years in the industry, he is most concerned about the looming physician shortage, which the Association of American Medical Colleges predicts will cause the U.S. to need 37,800-124,000 more doctors in the next 12 years.

As healthcare facilities look to scale back and cut costs in the face of rising inflation, panelists said, they’re also making reductions in administrative spending to account for pandemic staff losses and increasing demands by millennials for flexible work options.

That’s where real estate can step in, helping healthcare consolidate or reconfigure space to minimize staffing holes.

“A lot of those hospitals have that administrative space in the hospital, which is already certified for joint commission and other regulatory bodies, so changing that into clinical space makes great sense,” said Allyson Hanson, CEO and executive director of the Illinois Medical District.

That switch is not always easy though, according to Janus, who said health system executives are being cautious about using space they have no way of filling given current staff shortages. He said internal goals by hospital executives aimed at decreasing at least 50% of administrative space is the biggest shift the healthcare industry is seeing.

To counter that, Hanson said, helping healthcare providers find new business models that reimagine methods of care and patient services in the face of staff cuts and downsizings is paramount.

Telemedicine is one way industry providers continue to optimize in the face of consumer needs. That means the tech CRE brings in must be on point.

Michael Becker, senior director of real estate services at Anne & Robert H. Lurie Children’s Hospital, told the panel that the percent of people communicating with clinicians virtually is up, even now as panic over the pandemic winds down, adding there is particular room for growth when it comes to behavioral health-based services.

“Basically we’re stable at pre-pandemic levels and we’re now stable at 7% of total visits so our use has doubled in a couple of years,” Becker said. “I see that continuing to grow, but not dramatically, at least not in the next five-10 years.”

Becker said that though telemedicine ramped up from 3% to 40% at the height of the pandemic, it was hugely challenging for the hospital’s technology team. While incorporating tech is important, he said, brick-and-mortar facilities will still carry the industry.

In fact, demand for medical office buildings continues to drive new construction activity and acquisitions across Chicagoland. And while cap rates have risen on average, they have continued to compress for on-campus medical office buildings which set record highs for asking rents and sales volume in 2021, despite pandemic stressors. A similar resiliency is expected to persist into the near future.

“Medical office as compared to office or retail or some of the other food groups is still considered a better investment and will weather this turn better,” Janus said.

 

Source: Bisnow

Three Health Care Investment Trends For 2022

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The healthcare sector was one of the beneficiaries of the pandemic, and the industry is rapidly growing.

As investors plan for 2022, Meridian CEO John Pollock is predicting three trends will drive activity healthcare real estate.

1. More Outpatient Facilities

The transition to outpatient facilities has been an ongoing trend over the last decade, and it accelerated during the pandemic.

“Services are migrating away from the acute care centers to more convenient outpatient centers” Pollock tells GlobeSt.com. “Ambulatory outpatient care facilities have been at the center of Meridian’s focus for years and we expect this trend to continue to accelerate and translate into more opportunities for investors, developers, and providers alike.”

2. Telehealth Gaining Momentum

Telehealth is the second major trend that Pollock sees gaining momentum this year.

“Everyone has read about the rapid adoption of telehealth during the pandemic. It certainly spiked in 2020, and while it has since leveled off, it is still an integral and effective means to deliver care,” Pollack says. “The physical manifestation of that trend is creating more flexible exam and telehealth rooms.”

The telehealth trend supports better patient care, especially as providers rush to build outpatient ambulatory facilities.

“We have seen an increasing need for outpatient ambulatory care centers either de novo or through renovations that require heavy lifting to meet the new care delivery models,” says Pollock. “A huge benefit of telehealth is providing greater access to care. During the pandemic, it provided a vital access point to care when physical appointments were not practical. Telehealth also allows patients in rural settings to have access to a specialist from the urban centers.”

3. A Focus On Behavioral Health

Finally, health care providers will increase focus on behavioral health.

“We are seeing numerous requirements,” says Pollock. “The stress, isolation and loss caused by the pandemic was the final straw and it is now widely known that behavioral health conditions impact one in four Americans.”

It isn’t only cultural changes that are driving activity in the behavioral space, but institutional investors are also backing these projects.

“Institutional investors have warmed up to having behavioral health tenants in their buildings and portfolios, and we have even seen cap rates move toward traditional medical office building valuations,” says Pollock. “It’s very exciting to be a part of creating more access to these much-needed services in our communities.”

 

Source: BenefitsPRO