Tag Archive for: baby boomers

What MOB Tenants Are Looking For In The Perfect Space

The medical office market is booming—particularly for landlords with quality spaces that serve tenants’ needs. In most markets, however, there is a dearth of quality buildings, a trend that is putting upward pressure on rents. Smart owners will be able to capture the demand by filling tenant needs.

“Tenants want a building that reflects their image and a space that will create a positive patient experience. Each submarket is unique as to what that looks like,” Bryan McKenney, director of brokerage services at Cypress West Partners, tells GlobeSt.com. “Overall tenants want: landlords that take a proactive approach to image and maintenance; signage (where possible) and wayfinding; ease of parking (which in Orange County is often free and surface), landlords that commit the necessary tenant improvements and provide functional spaces.”
Like in most asset classes, there is a shortage of quality supply for tenants. “In the best markets, no. As you move away from the bullseye, there are options that can satiate need but it is a balancing act,” says McKenney. “For those practices trying to serve the high-end patient who chooses cash pay, concierge, and elective medicine, they want to be in the best area, with the best demographics and then experience corresponding higher rents and a tight supply of product.”

The race for quality is also a reflection of the demographics these centers are servicing: the baby boomer crowd.

“Seventy percent of the disposable income in the US is controlled by the baby boomers,” Jason Krotts, principal at REDA, tells GlobeSt.com. “In various demographic markets, these Boomers can demand higher quality services, which translate to higher quality buildings and amenities.”

Investors are also focusing on quality as a defensive-buying strategy.

“With the bull market lasting as long as it has, investors are looking to acquire product that provides good defensive characteristics—no different than when stock pickers rotate into consumer staples,” says McKenney. “MOB proved resilient to market shocks in the Great Recession. During the past 10 years, there has been a ton of money raised and to now deploy it in a strong Southern California market is difficult. Often investors will have one set of underwriting guidelines for most markets and then have a second set for the tough to crack markets. The term “California Premium” is often used when discussing how the cap rate here does not match most other investment profiles.”

However, landlords are also starting to require longer lease terms as well for medical office tenants.

“In certain markets there are always higher barriers to entry, California is especially one,” says Krotts. “Given the challenging hurdles to obtain development approvals in the state, it makes for strong demand in the capital markets. Medical tenants are considered ‘sticky,’ meaning they sign longer-term leases and typically don’t relocate. Investors, when analyzing a particular investment are seeking a predictable, long term income stream and medical can provide this. There has been a tremendous amount of capital raised for MOB and the predictable income stream is a main component along with the general grow from the demand for expanded services.”

 

Source: GlobeSt.

/by

Designing Healthcare for Every Generation

The physical environment can have a big impact on how an employee feels and can either facilitate their ability to do their job or create frustrating barriers, but these pain points, preferences, and motivators look different for Baby Boomers, post-millennials, and everyone in between.
In light of the growth of healthcare’s generationally diverse workforce, understanding the most important drivers of staff satisfaction provides a powerful opportunity to improve quality of care, patient experience, and ultimately, the bottom line.
Baby boomers are emotionally invested in patients but report being emotionally exhausted and physically fatigued.
Concerned with a work-life balance and their health, Gen Xers can be stressed by long hours and search for more flexible jobs. When promoted to supervisory roles, they are challenged by managing diverse teams in today’s workforce.
Millennials are tech-reliant and frustrated with inefficient processes and lack of technology. They are motivated by altruistic missions, benefits, teamwork, and mentorship. They value flexibility and workplace wellness. By 2025, 75% of the workforce will be millennials or post millennials.
Entrepreneurial in spirit, Post-Millennials are natural multi-taskers, appreciate the increased productivity afforded by technology, and are most likely to question the status-quo.
Despite these differences, several DFW projects have adapted popular workplace trends to respond to today’s multi-generational staff and create supportive environments that increase satisfaction, recruit and retain talent, and improve patient outcomes with more engaged caregivers.

Variety and Control

Offering a mix of postures provides the power of choice to personalize the workplace according to their workstyle or the task at hand. Lighting and acoustics add layers of control and comfort to mitigate distractions and create opportunities for more inviting, functional spaces for relationship building and mentorship. Hybrid environments such as corridor alcoves and centralized nurses’ station being designed at Methodist Midlothian offers multiple settings and flexible furniture to suit several concurrent needs and workstyles–empowering millennials, who value team-oriented settings, with collaborative spaces to learn from more experienced colleagues while those looking for “heads down” time can find nestled work stations connected to the department.

Wellness and Mindfulness

The health of nurses is worse than that of the average American–many overweight, over-stressed and more susceptible to a job-related injury. Incorporating WELL Building Strategies such as sit to stand workstations and healthy food options provides measurable solutions for improving overall well-being. Naturally inspired colors, textures and visual effects— laminate, porcelain, and vinyl designed to look like wood, for instance—replicate the sensory effect of being outside in a healthcare appropriate setting. For those managing 12-hour shifts, averaging 25,000 steps per day, and dealing with the emotional fatigue of large caseloads, respite areas with serene images, lounge furniture, and views to the outdoors provides accessible reprieve between patients while encouraging a more balanced culture.

Technology

Healthcare as an industry is filled with cutting-edge medical equipment technology, but the day-to-day technology provided to front line clinical staff often falls well behind corporate workplace standards. Access through handheld devices and at appropriately located workstations with badge-tap log-ins improves efficiency and reduces frustration in Parkland Hospital. Electronic medical records continue to improve as software systems become fully integrated across the healthcare systems. For example, EMR can scan systems associated with patient medication dispensing and reduce errors by automatically crosschecking the medication and dosage with the patients’ medical records.
From emerging talent that tend to be drawn to amenities and workplace perks to experienced staff juggling the demands of physical and psychological stressors, healthcare’s modern workforce differ in how core values take shape. All staff, regardless of their generation or experience level, want to know their contributions matter and feel that they are valued. They need the right tools in the right place at the right time with customizable environments that are as nimble and responsive as they are to the demands of the day. Finally, while healthcare design and operations have been very good at caring for patients, staff need a workplace that is just as successful at caring for them.
Tina Larsen, AIA, LEED AP, EDAC is the Healthcare Market Sector Leader for Corgan and has over 32 years of experience on a wide variety of complex clinical projects in both renovations and ground-up facilities.
Source: D CEO Healthcare
/by

Aging Population Shaping Health Care Real Estate

The aging population and the unknown future of policies are shifting the way health care organizations think about real estate.
National real estate firm JLL recently completed research on the health care industry and how organizations approach real estate with the changing landscape.
JLL Senior Vice President of Health Care Paul Heiserman said it would be impossible to talk about real estate in health care without first acknowledging the growing need to service the baby-boomer bubble, as well as the increasing costs from more advanced services and pharmaceuticals.

“Better services but not cheaper services,” said Heiserman, who is based in Columbus, Ohio. “That’s driving up prices that are really unsustainable.”

Heiserman said employers used to be more willing to take on the full burden of health care costs for their employees, but with the rising prices, the responsibility is shifting some to the patients.
The shift in payment responsibility is causing some pinches at the health care provider level and shifting the focus on where the importance of health care lies, Heiserman said.
A greater importance is being placed on reducing per capita cost, improving the overall population health and improving the overall patient experience, he said.

“Those three slices are driving a lot of what we’re seeing in the health care industry in terms of real estate,” Heiserman said.

JLL’s research concluded with five main trends in health care real estate: building room for change; optimizing their existing real estate; putting convenience first; smarter site selection based on demographics, including the placement of outpatient surgical centers; and advanced management to mitigate risks of more locations.
The trends are ways health care systems are looking to improve patient care while lowering costs, Heiserman said.
The way health care systems value patients is changing, Heiserman said. Where hospitals used to make more money by having more patients in beds, there’s now an added focus on preventive care to keep patients out of acute care, he said.
The change in philosophy is adding to the first trend, which is designing health care space to flexibility.

“We have a major shift right now, and we’re not sure where it shakes out,” he said. “You can’t count on a facility to be a static use for 20, 30 years. Design it in a way it can be converted to something else. In 20 years, what is an emergency room now might be required to be something else.”

Heiserman mentioned a health care client in another region looking to optimize its lab space. The client currently has three labs spread across different locations, not fully optimizing space.
The opportunity to consolidate lab space and eliminate duplicate real estate uses is another trend seen in the industry, Heiserman said. He said in the past, health care organizations often would grow for the sake of growth.

“They would grow whichever way made the most sense,” he said. “That worked well when there wasn’t pricing pressure. Now, it doesn’t make as much sense.”

More health care organizations nationwide are beginning to follow Fortune 500 companies in the way real estate operations are tracked and organized, he said.

“Hospitals aren’t cutting edge,” he said. “When we talk about optimization, now they’re beginning to look at operations and where they make sense. A lot of hospitals are moving administration into less expensive spaces off campus.

“The highest and best use is not administrative use.”

Another trend in health care is the location of services to more convenient locations for patients, Heiserman said.
Service convenience is being seen in Grand Rapids, said Jeff Karger, JLL senior vice president of brokerage in Grand Rapids. He pointed to Spectrum Health opening clinical space in Grand Haven and on East Beltline.

“They’re bringing it back toward the consumer, versus the acute area downtown,” Karger said. “It puts convenience first, so it encourages the patient to participate more.”

To establish those locations, health care systems are turning toward more detailed analytics to discover what move makes the most sense. The analytics are similar to how national retailers might select their next site, Karger said.
Prior to costs rising significantly, health care systems really didn’t have a need to be super selective in their next site, Heiserman said.

“Hospitals operate independently and tend not to go into other regions and tend to be very large and powerful within their community,” he said. “Hospitals were working on an island for many years and maybe didn’t have the need for increasing sophistication, but now with the pressure, they need to sophisticate to increase efficiency.”

The need for efficiency is driven by the growing competitive nature of health care, Heiserman said. Systems must be able to attract a set of patients more capable of paying so they can in turn offer cheaper services to treat a greater population.

“We’re in a largely competitive environment; most markets have quite a bit of competition, and there’s an element of trying to protect but also gain market share,” Heiserman said. “Particularly, market share that pays well, so the hospital can provide better service.”

Source: GRBJ
/by

Healthcare Real Estate: A Unique And Bullish Market

The future of healthcare real estate is bright with baby boomers aging, but industry leaders weighed in on what could change and why this segment is so unique from an operations standpoint.

“I’m easily bullish [on healthcare real estate]. 100%,” HCP Vice President of Leasing Tom Hulme said. “The market is smoking hot, and I’m absolutely bullish.” Hulme and other healthcare real estate leaders convened Monday at the 2017 BOMA International Conference & Expo to discuss the state of their sector and the unique nature of their arc of commercial real estate. LifePoint Health Senior Director of Real Estate Tammy Moore was equally bullish on the industry based on the sheer fact that there are so many baby boomers aging into the demographic likely in need of healthcare facilities. They were joined by Cambridge Holdings’ Ryan Doyle, who also was optimistic but cautioned ever-changing consumer demands could lead to a bearish climate.

Hospitals in tertiary markets have been closing in the years since the passing of the Affordable Care Act, but the panel was not ready to put the blame solely on the ACA. Hulme said his company did not see business impacted in the last seven to eight years from healthcare reform.

“I’ve read a report saying the United States is over-bedded, so you have to wonder if hospitals are closing because of that,” Moore said.

The panel also discussed the unique nature of healthcare real estate. Moderator and Healthcare Realty Trust Vice President Amy Byrd said medical office buildings have more specialized requirements and often have drastically more visitors than other commercial properties, leading owners or managers to approach operations and design in a different way — down to slight inclines in hallways and how that might affect a visitor.
While healthcare facilities might require more focus on detail, Byrd enjoys the challenges of this property type.

“I feel every day like I’ve contributed to someone’s well-being,” she said.

Source:  Bisnow
/by