Healthcare Real Estate ‘Remains A Sector Of Change’ Amid Pandemic

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A new report from BTIG shows that health care REITS are down nearly 26% year-to-date as opposed to the wider REITS sector, which is down about 14%.

The report states that health care “remains a sector of change.”

“The acute phase of the COVID-19 pandemic has led to different levels of operating stress across the healthcare system,” the report states…. “Potential disparities in outcomes based on insurance coverage during the pandemic could also lead increased calls for changes to government healthcare programs.”

The same report does show that medical office building REITs have held up pretty well and have been “relatively resilient.”

The report says that since April during the midst of the coronavirus pandemic, “outpatient volumes have risen to 69% of pre-COVID levels… Accordingly, our MOB (medical office building) coverage has collected 95% of second quarter rent on average, stability which is reflected in unchanging MOB dividends.”

As it pertains to senior housing trends, BTIG says senior housing facilities and their residents are taking the advice of health experts.

The numbers of seniors in such facilities who have contracted the virus has declined, BTIG says.

“Specifically, for SNR, less than 0.2% of residents and employees are positive for the virus, and the new case rate has declined 91% from peak levels in April,” the report says. “Thus, 90% of SNR properties have begun lifting restriction using a phased approach so that residents can return toward normality and new residents can begin moving in.”

The report concludes: “We expect this same-store operational and occupancy focus to remain at the forefront until REITs’ cost of capital improves enough to return to the acquisition market.”

 

 

Source:  GlobeSt.

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Bayfront Health St. Petersburg To Be Sold To Orlando Health

The city’s oldest and largest hospital, Bayfront Health St. Petersburg, is set to be sold to nonprofit health care company Orlando Health, pending a vote by the City Council on July 9.

Community Health Systems Inc., the private company which currently owns the 480-bed facility, announced it had signed an agreement with Orlando Health on Thursday. The news comes about a year after city officials raised concerns about the management of the hospital, which sits on city-owned land and provides care to all, regardless of insurance status.

Orlando Health will take over operations and the long-term lease that Community Health Systems holds with the city, so long as council members approve next month, a news release said. A copy of the proposed lease obtained by the Tampa Bay Times shows it would run for 50 years.

The agreement states Orlando Health must continue to “provide charity care to needy and underserved persons” and “those who may otherwise be unable to afford or obtain care due to various possible adverse circumstances.”

City councilman Robert Blackmon, who was born at Bayfront St. Petersburg, said Friday that continuing the charity care was a “sticking point” in negotiations with Orlando Health. He said he will support the agreement, as did councilwoman Darden Rice.

After a one-on-one conversation with the company’s president and CEO David Strong a couple of months ago, Blackmon said he is confident charity care will continue at the hospital — and be even better under new management.

He pointed to a string of troubles at Bayfront under Community Health Systems, which purchased it in 2013. The hospital has seen layoffs and resignations of top executives, the ending of a partnership with the University of South Florida, and a Department of Justice investigation related to charity care finances in recent years.

Already frustrated, city officials grew more so in early 2019, when then-Bayfront CEO Joe Mullany gave council members a glowing annual report that did not align with problems playing out in public view.

“We’ve had difficult times in the last few years,” Blackmon said. “Orlando Health is the best-situated group to bring (Bayfront) back to the excellence it was once known for.”

Rice called the sale the “only reasonable solution” to the ongoing issues at the hospital.

“Ultimately, the new ownership is what is best for our community,” she said.

The city’s other six council members did not respond to requests for comment Friday. Mayor Rick Kriseman was not available for an interview.

About 15,000 patients were served at Bayfront St. Petersburg in 2018, according to hospital records. As of July 2019, the hospital employed 1,839 people and had 171 open positions.

Officials for Orlando Health declined to be interviewed, instead releasing a statement that said the sale should be final by Sept. 30.

Peter Young, a hospital consultant based in Fort Myers, said Orlando Health, which operates the only Level 1 trauma center in the Orlando area, is in an “expansion moment” of “picking up the skeletal remains” of hospitals in need of rejuvenation.

The purchase of Bayfront St. Petersburg would be the nonprofit’s debut in the Tampa Bay area, and make it so the nonprofit owns 14 total hospitals, according to the Orlando Sentinel. The sale also would mark the second Community Health Systems hospital acquired by Orlando Health, as it purchased Osceola County’s St. Cloud Regional Medical Center in April, the Sentinel reported.

Community Health Systems, based in Tennessee, has sold more than 50 hospitals since 2017 to pay off debt related to its $7.6 billion purchase of Florida’s Health Managed Associates in 2014, according to the National Business Journal.

Bayfront officials declined to be interviewed, and the company released a statement by Sharon Hayes, chief executive officer of the St. Petersburg hospital:

“Orlando Health is well-respected for their work to sustain and enhance medical services, and we are excited to partner with them to benefit our patients and communities,” she wrote. “This is an extraordinary time in health care and together we will continue to provide quality care for our neighbors, friends and family.”

 

Source:  Tampa Bay Times

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AdventHealth Plans New Medical Office Building Near Downtown Orlando

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AdventHealth plans to build a new facility near its downtown-area campus.

The Altamonte Springs-based nonprofit health system is seeking city of Orlando approval for a 12-story medical office building with a parking garage at a listed address of 225 E. Rollins St.

The project — codenamed “Project Lego” and slated to be built on 15 parcels of land — has not submitted additional project documents with the city of Orlando yet, said city spokeswoman Samantha Holsten.

AdventHealth representatives declined to comment.

The health system is being represented by Orlando-based GrayRobinson law firm for its application seeking site plan approval.

The facility would be built inside AdventHealth Health Village, a 172-acre mixed-use community surrounding AdventHealth’s downtown Orlando campus. The longterm plan for the district includes:

  • Room for up to 800 additional hospital beds
  • 600,000 square feet of medical office space
  • 100,000 square feet of general office space
  • 100,000 square feet of retail space
  • Up to 670 residential units
  • A future hotel

Some of that residential development already has kicked off in the area. Orlando-based Ustler Group of Cos. and Atlanta-based Wood Partners are underway on construction of the 285-unit Alta at Health Village apartment complex at Orange Avenue and Winter Park Street, which is expected to be completed by mid-2021.

Ustler Group of Cos. President Craig Ustler supports having a diverse mix of real estate uses there, because they help enliven the area and add to the hospital’s presence, he told Orlando Business Journal.

 

Source:  OBJ

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Broward Health Buys Vacant Land For $14.5M

Broward Health is poised to expand after purchasing vacant land in Parkland for $14.5 million.

Lucky Land Star Holdings, managed by Agustin Herran in Miami, sold seven acres at the southwest corner of University Drive and Trails End to the North Broward Hospital District, the public body that runs Broward Health.

Herran is part of the family that owns Sedano’s Supermarket. His company acquired the property in deals of $8.8 million in 2012 and $950,000 in 2017.

No development plans have been approved there, but Broward Health could look to build an outpatient center. It has a hospital in neighboring Coral Springs.

 

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