The Impact of Healthcare in Real Estate

Who is being affected?

Many of the recent changes in the healthcare industry have drastically changed the way in which today’s consumer demands  access to healthcare.  Today’s consumer expects both convenience and quality care in close proximity to where they live. Historically, we have seen acute care facilities as  common practice; today’s Healthcare facilities are aiming for the most cost-effective ways to deliver service.  Some of the real estate sectors that have seen the most impact include:

  • Medical Product & Equipment Warehouses
  • Pharmaceutical & Laboratory Facilities
  • Outpatient Surgery and Treatment Centers
  • Medical Office Buildings (MOB’s)
  • Health Retailers & Co-tenancy in Retail Centers
  • Urgent Care Facilities

Other Factors Impacting Real Estate Markets

Aging Population

An estimated 3 million baby boomers will hit retirement age each year, over the next 20 years. An aging population calls for an increased demand for healthcare. Most of healthcare spending is non-discretionary and often requires physical space for delivery of care both in Medical Space and Senior Housing.

Alignments and Consolidations

Physician Groups and Hospitals may consolidate their medical practice groups or form alliances to expand their footprint. Both scenarios will create an increased demand for re-development, enhanced utilization of existing space, and opportunities for new space.  It may also decrease demand for smaller medical office space in the market.

Example: Tampa General Hospital and Florida Hospital joined forces to build a multi-million dollar outpatient center in Brandon. This was not a merger; all hospital operations remained separate. The new company is called West Florida Health. The goal was to become a collaboration of both independent and employed doctors and   providers that can work together to provide quality care for patients. This is just one of the many examples happening in our community…continue reading

Mergers and Acquisitions (M&A)

With the continuous expansion in healthcare coverage, the demand for healthcare accommodations rise. This growth creates an active M&A   market.  Example: HCA  purchased 3 hospitals from IASIS Healthcare, LLC, including Memorial Hospital of Tampa, Palms of Pasadena, and Tampa Community (formerly Town & Country). This enabled HCA to expand their footprint/coverage in the Tampa Bay Region…continue reading