Healthcare systems and physicians groups once viewed their real estate operations as a line item on a ledger and not as high a priority as staffing, education or equipment. In the years since reimbursements from Medicare began tightening as it went from a fee-for-service model to an outcome-based one, healthcare systems and physicians are getting more savvy when it comes to their real estate strategies.
“With respect to real estate, healthcare systems used to be naïve,” said Mark Curtis, director of Greenville Health System, a not-for-profit system serving the Upstate South Carolina area. “Now they’re far more sophisticated than they were five years ago.”
Curtis was one of five healthcare real estate experts on stage at a panel entitled “What Do Hospitals & Systems See Coming in 2018?” Rex Noble, senior vice president of asset management at Flagship Healthcare Properties, moderated the discussion.
The panel was the closing act at the eighth annual InterFace Healthcare Real Estate Carolinas show, which took place on May 31 at the Hilton City Center hotel in Uptown Charlotte. The event drew 160 attendees in the healthcare real estate space from across North and South Carolina.
Operations Are Under The Microscope
Spurred on by lower reimbursements and increasing expenses due to inflation, healthcare systems are taking a holistic view of their business strategies. As a result, a higher priority is given to real estate than ever, according to the panel.
“We’re absolutely trying to be more sophisticated with our real estate,” said Tony Perez, vice president of real estate at Atrium Health. Formerly known as Carolinas HealthCare Systems, the not-for-profit group operates more than 7,600 beds across 900 care locations. “Five years ago we weren’t talking about yields coming in and cap rates going out, we were talking about rental rates.”
Atrium Health recently announced it plans to invest more than $1 billion in the next seven years around the metro Charlotte area. At the same time, Perez said the company is focused on cutting expenses, including on the real estate side.
“We are absolutely trying to cut expenses — $300 million by 2020,” said Perez. “Last year we did $35 million and we’ve already done $35 million this year, but our goal this year is $95 million. Everyone is going to bleed, and on the real estate side, capital is scarce.”
Healthcare real estate professionals are looking internally at doctors’ daily practices in order to drive efficiencies as well. Elisa Cooper, director of property management at Roper St. Francis Healthcare, a nonprofit healthcare system in Charleston, says that real estate sustainability is now prioritized over expansion.
“We’re driving down operations to the metrics of how many patients touch an exam room,” said Cooper. “If a physician can’t put five patients a day in that exam room, they don’t need it. We take it out and add another doctor’s office.”
On the development side, site selection is in the limelight for healthcare real estate professionals because patients now want ease of access to their medical care more than anything, according to the panel.
“The ‘build it and they will come’ days are long gone,” said Greenville Health’s Curtis.
Perez says that healthcare groups are still novices when it comes to site selection for hospitals and medical centers, but soon they will have the capabilities and resources on the same level as major retailers.
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
Curtis was one of five healthcare real estate experts on stage at a panel entitled “What Do Hospitals & Systems See Coming in 2018?” Rex Noble, senior vice president of asset management at Flagship Healthcare Properties, moderated the discussion.
The panel was the closing act at the eighth annual InterFace Healthcare Real Estate Carolinas show, which took place on May 31 at the Hilton City Center hotel in Uptown Charlotte. The event drew 160 attendees in the healthcare real estate space from across North and South Carolina.
Operations Are Under The Microscope
Spurred on by lower reimbursements and increasing expenses due to inflation, healthcare systems are taking a holistic view of their business strategies. As a result, a higher priority is given to real estate than ever, according to the panel.
“We’re absolutely trying to be more sophisticated with our real estate,” said Tony Perez, vice president of real estate at Atrium Health. Formerly known as Carolinas HealthCare Systems, the not-for-profit group operates more than 7,600 beds across 900 care locations. “Five years ago we weren’t talking about yields coming in and cap rates going out, we were talking about rental rates.”
Atrium Health recently announced it plans to invest more than $1 billion in the next seven years around the metro Charlotte area. At the same time, Perez said the company is focused on cutting expenses, including on the real estate side.
“We are absolutely trying to cut expenses — $300 million by 2020,” said Perez. “Last year we did $35 million and we’ve already done $35 million this year, but our goal this year is $95 million. Everyone is going to bleed, and on the real estate side, capital is scarce.”
Healthcare real estate professionals are looking internally at doctors’ daily practices in order to drive efficiencies as well. Elisa Cooper, director of property management at Roper St. Francis Healthcare, a nonprofit healthcare system in Charleston, says that real estate sustainability is now prioritized over expansion.
“We’re driving down operations to the metrics of how many patients touch an exam room,” said Cooper. “If a physician can’t put five patients a day in that exam room, they don’t need it. We take it out and add another doctor’s office.”
On the development side, site selection is in the limelight for healthcare real estate professionals because patients now want ease of access to their medical care more than anything, according to the panel.
“The ‘build it and they will come’ days are long gone,” said Greenville Health’s Curtis.
Perez says that healthcare groups are still novices when it comes to site selection for hospitals and medical centers, but soon they will have the capabilities and resources on the same level as major retailers.
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
Operations Are Under The Microscope
Spurred on by lower reimbursements and increasing expenses due to inflation, healthcare systems are taking a holistic view of their business strategies. As a result, a higher priority is given to real estate than ever, according to the panel.
“We’re absolutely trying to be more sophisticated with our real estate,” said Tony Perez, vice president of real estate at Atrium Health. Formerly known as Carolinas HealthCare Systems, the not-for-profit group operates more than 7,600 beds across 900 care locations. “Five years ago we weren’t talking about yields coming in and cap rates going out, we were talking about rental rates.”
Atrium Health recently announced it plans to invest more than $1 billion in the next seven years around the metro Charlotte area. At the same time, Perez said the company is focused on cutting expenses, including on the real estate side.
“We are absolutely trying to cut expenses — $300 million by 2020,” said Perez. “Last year we did $35 million and we’ve already done $35 million this year, but our goal this year is $95 million. Everyone is going to bleed, and on the real estate side, capital is scarce.”
Healthcare real estate professionals are looking internally at doctors’ daily practices in order to drive efficiencies as well. Elisa Cooper, director of property management at Roper St. Francis Healthcare, a nonprofit healthcare system in Charleston, says that real estate sustainability is now prioritized over expansion.
“We’re driving down operations to the metrics of how many patients touch an exam room,” said Cooper. “If a physician can’t put five patients a day in that exam room, they don’t need it. We take it out and add another doctor’s office.”
On the development side, site selection is in the limelight for healthcare real estate professionals because patients now want ease of access to their medical care more than anything, according to the panel.
“The ‘build it and they will come’ days are long gone,” said Greenville Health’s Curtis.
Perez says that healthcare groups are still novices when it comes to site selection for hospitals and medical centers, but soon they will have the capabilities and resources on the same level as major retailers.
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“We’re absolutely trying to be more sophisticated with our real estate,” said Tony Perez, vice president of real estate at Atrium Health. Formerly known as Carolinas HealthCare Systems, the not-for-profit group operates more than 7,600 beds across 900 care locations. “Five years ago we weren’t talking about yields coming in and cap rates going out, we were talking about rental rates.”
Atrium Health recently announced it plans to invest more than $1 billion in the next seven years around the metro Charlotte area. At the same time, Perez said the company is focused on cutting expenses, including on the real estate side.
“We are absolutely trying to cut expenses — $300 million by 2020,” said Perez. “Last year we did $35 million and we’ve already done $35 million this year, but our goal this year is $95 million. Everyone is going to bleed, and on the real estate side, capital is scarce.”
Healthcare real estate professionals are looking internally at doctors’ daily practices in order to drive efficiencies as well. Elisa Cooper, director of property management at Roper St. Francis Healthcare, a nonprofit healthcare system in Charleston, says that real estate sustainability is now prioritized over expansion.
“We’re driving down operations to the metrics of how many patients touch an exam room,” said Cooper. “If a physician can’t put five patients a day in that exam room, they don’t need it. We take it out and add another doctor’s office.”
On the development side, site selection is in the limelight for healthcare real estate professionals because patients now want ease of access to their medical care more than anything, according to the panel.
“The ‘build it and they will come’ days are long gone,” said Greenville Health’s Curtis.
Perez says that healthcare groups are still novices when it comes to site selection for hospitals and medical centers, but soon they will have the capabilities and resources on the same level as major retailers.
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“We are absolutely trying to cut expenses — $300 million by 2020,” said Perez. “Last year we did $35 million and we’ve already done $35 million this year, but our goal this year is $95 million. Everyone is going to bleed, and on the real estate side, capital is scarce.”
Healthcare real estate professionals are looking internally at doctors’ daily practices in order to drive efficiencies as well. Elisa Cooper, director of property management at Roper St. Francis Healthcare, a nonprofit healthcare system in Charleston, says that real estate sustainability is now prioritized over expansion.
“We’re driving down operations to the metrics of how many patients touch an exam room,” said Cooper. “If a physician can’t put five patients a day in that exam room, they don’t need it. We take it out and add another doctor’s office.”
On the development side, site selection is in the limelight for healthcare real estate professionals because patients now want ease of access to their medical care more than anything, according to the panel.
“The ‘build it and they will come’ days are long gone,” said Greenville Health’s Curtis.
Perez says that healthcare groups are still novices when it comes to site selection for hospitals and medical centers, but soon they will have the capabilities and resources on the same level as major retailers.
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“We’re driving down operations to the metrics of how many patients touch an exam room,” said Cooper. “If a physician can’t put five patients a day in that exam room, they don’t need it. We take it out and add another doctor’s office.”
On the development side, site selection is in the limelight for healthcare real estate professionals because patients now want ease of access to their medical care more than anything, according to the panel.
“The ‘build it and they will come’ days are long gone,” said Greenville Health’s Curtis.
Perez says that healthcare groups are still novices when it comes to site selection for hospitals and medical centers, but soon they will have the capabilities and resources on the same level as major retailers.
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“The ‘build it and they will come’ days are long gone,” said Greenville Health’s Curtis.
Perez says that healthcare groups are still novices when it comes to site selection for hospitals and medical centers, but soon they will have the capabilities and resources on the same level as major retailers.
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“I don’t theorize a lot, but I’d say that large health systems will be as proficient as Target and Walmart about sites in the future,” said Perez.
Physicians themselves are looking at real estate in a different light too, according to the panel. Curtis said that physicians are more actively involved in operation expense discussions as they look to get better returns on their real estate investments.
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“If I look at where physicians are in those conversations, they’re partners at the table,” said Curtis. “Physicians are looking at what we do and how we deliver care and what that cost is.”
“When I first came into the business 14 years ago, our meetings with the doctor groups were all about how big could we build it and how pretty could we make it,” added David Park, senior vice president of Novant Health. The Winston-Salem, N.C.-based healthcare network operates 14 medical centers and more than 500 physicians clinics and outpatient centers across North Carolina, South Carolina, Georgia and Virginia.
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“The conversation today with the doctors are more around trimming the size down and cutting the costs,” said Park. “It’s a new level of education for the entire core of the healthcare industry.”
Caring for Millennials
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
In addition to dwindling reimbursements, healthcare systems are also feeling the pinch from the rise of millennials, who by and large are shifting the way healthcare is provided. Atrium Health’s Perez doesn’t think that millennial preferences will eliminate the need for brick-and-mortar medical office buildings, but their presence is certainly felt.
“Millennials will bend the curve for some specialties, family practices and maybe urgent care,” said Perez, who emphasized what Atrium Health is preparing for in its consumer readiness program. “Our view is that one day you’ll be able to use your phone, be able to virtually talk with a physician who will order your drugs and then a drone will drop it off at your house.”
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“We’re planning for today, but really we can’t plan for today. We have to plan for 10 years from now,” added Cooper of Roper St. Francis.
Cooper said that millennials are propping up the urgent care business model and are electing not to visit or even select a primary care physician. She doesn’t envision this as a long-term trend as millennials are aging and will eventually need more services than they currently receive.
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“They don’t go to primary care doctors unless they’re really sick and they don’t go in for checkups unless they’re forced to by their employer,” said Cooper. “Millennials today will actually need the healthcare service that they don’t think they need today.”
Jeff Brown, principal of healthcare real estate advisory firm Meadows & Ohly LLC, said that millennials’ preferences for healthcare are forcing healthcare systems to walk a tightrope between planning for an uncertain future and making sure that the current needs of aging baby boomers are being met.
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“It’s going to be a balancing act,” said Brown. “Being on the real estate side, we’re trying to figure out where the right bets are.”
In the near-term, Brown said that millennials are changing the way healthcare groups are looking at their operations as they strive to maximize traffic in that age cohort.
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
“More than anything healthcare systems are talking about their ambulatory and digital strategies,” said Brown. “It’s been proven urgent care doesn’t work from a profitability standpoint, but from a need and access standpoint it does work for millennials.”
Source: “>RE Business
In what could be the largest medical office building (MOB) portfolio sale since last year’s Duke Realty sale, multiple healthcare real estate (HRE) industry sources tell Healthcare Real Estate Insights that CNL Financial Group plans to sell the MOB portfolio owned by its Orlando-based CNL Healthcare Properties real estate investment trust (REIT).
Sources say CNL has hired HFF and KeyBank to market the properties.
Efforts to contact executives of CNL, HFF and KeyBank have been unsuccessful. However, multiple HRE industry sources have told HREI that they have heard that a sale is in the works.
Not to be confused with CNL Healthcare Properties II, which was launched in 2016 and is still open to new investors, CNL Healthcare Properties is a non-traded REIT closed to new investors on Sept. 30, 2015.
According to a fact sheet available on its website, CNL Healthcare Properties developed and acquired properties with a total investment of about $3.02 billion from 2012 to 2015. The REIT consists of 58 percent senior housing, 31 percent MOBs, 6 percent post-acute and 5 percent acute care facilities, based on purchase price, development budget and/or capitalized cost.
Sources say that at this time CNL plans to sell only the MOBs, not the other assets. The REIT’s portfolio includes 54 MOBs totaling about 3.26 million square feet, according to the fact sheet.
The MOBs with the greatest valuation include: Midtown Medical Plaza, Charlotte, N.C., $54.7 million; Presbyterian Medical Tower, Charlotte, N.C., $36.3 million; Bend Memorial Clinic MOB, Bend, Ore., $36 million; Center One, Jacksonville, Fla.; $34.4 million; and UT Cancer Institute Building, Knoxville, Tenn., $33.7 million.
The total investment amount for the MOBs was $931.4 million, according to the fact sheet, which would almost certainly mean they would fetch more than $1 billion if sold in a competitive bidding situation.
Source: HREI
As head of Kaiser Permanente’s real estate division, Ethan Sullivan receives phone calls on a daily basis from developers, landowners and retail strip owners about wanting a Kaiser medical facility to anchor their properties.
But before those anxious owners get too excited, Sullivan immediately lets it be known that bringing in a Kaiser Permanente medical office or any kind of medical facility as a cornerstone of a retail strip or shopping mall is a serious commitment.
“When we make a decision to go somewhere, it is a lifetime decision,” said Sullivan, who serves as the executive director of real estate, national facilities services at Kaiser Foundation Health Plan. “We are making a commitment to that community to be in that location,” he said.
Much has been made about healthcare being the new retail that could eventually replace many of the big-box stores that have been struggling and closing. Trends influencing healthcare facilities will be discussed at Bisnow’s National Healthcare West event on June 7.
The U.S. healthcare industry is a $3.5 trillion business, said JLL Managing Director of Healthcare Solutions Chad Pinnell.
In 10 years, that number is expected to grow to $6 trillion, Pinnell said. He said the healthcare industry has moved toward preventive care, which can mean more visits to the doctor’s office.
Pinnell and Sullivan were part of a panel at the International Council of Shopping Centers’ RECon convention last week.
Over the past several years, there have been cases of big-box stores closing and being replaced with medical facilities. In 2010, when Blockbuster went out of business, Johns Hopkins Medical Management Corp. and Patient First opened four urgent care facilities in Maryland at locations the video store once occupied.
In New York, a Mount Sinai Urgent Care facility replaced a closed McDonald’s.
“They are a bigger industry than retail,” Pinnell said. “They touch more people. There are 300 million people in the U.S. and they all have healthcare needs.”
Pinnell said the biggest challenge healthcare providers have is distribution. Many networks are scattered, he said.
“In the next five to 10 years, what you are going to see are partnerships with retail centers and healthcare companies,” he said.
But for Kaiser Permanente, partnering with a landowner or developer to build a medical facility is not as easy as it seems, Sullivan said.
With 12 million members and rising, Kaiser Permanente operates a 71M SF real estate portfolio that includes nearly 40 hospitals and 700 medical facilities across eight states. The company owns 80% of its real estate and almost never sells, he said.
Sullivan said the healthcare company has plans to open 20 to 25 more medical facilities, averaging about 50K to 60K SF, within the next two years.
When it comes to choosing a site, Kaiser Permanente is very particular about the location.
He said much like retailers the healthcare company looks for areas where there is a heavy concentration of its members. Kaiser also looks at drive time — how long it is going to take members to get there, the parking situation and what retail stores are in that development or nearby.
“We love visibility,” Sullivan said. “We want people to be able to see us from the freeway, the corner, so our members know where we are in this town.”
Other challenges include getting city approvals and getting the right design for the facility. The average lease the company signs is for 10 years, but Kaiser builds facilities that could last for 50 to 100 years.
“My first question [to developers and landowners] is: Have you actually ever built a medical office building before?” he said. “It’s incredibly hard if you have never done it before. It is a significant investment.”
He said building a medical facility is not like developing a Toys R Us.
“You need to have an understanding of the right mechanical systems, know the intricacies of the machines we use and the lab usage,” he said, adding that the company’s design guideline is 132 pages long.
The type of services the medical facility offers will also dictate Kaiser’s demands.
“Primary care or specialty care or oncology all have a different set of walk-throughs with the city and design,” he said.
But if Kaiser Permanente does choose a property owner’s site, it can be a fruitful relationship.
Kaiser Permanente is a multibillion-dollar company and it is a good credit tenant. Having a medical facility anchor a place could drive people into the retail property, benefiting the surrounding businesses, Sullivan said.
“It’s a partnership. It’s a collaboration,” he said. “You are going to help bring our vision to life but you’re going to know early on what you are getting into.”
Source: Bisnow
