Healthcare Real Estate Trends to Watch

It may be an understatement to say that healthcare industry trends are a hot topic right now. We are keeping an eye on healthcare trends and the impact on commercial real estate, not only because it is our job, but also because these trends impact each of us as individuals and families. BisNow put together a great article on healthcare commercial real estate trends to watch this year. Our recap of the article is below, but click here to read the full details.

Related- Owner’s Rep on Healthcare Construction Projects

Small Scale Hospitals

You may have already noticed the amount of urgent care, retail clinics and micro-hospitals that are popping up in urban and suburban ears. These facilities are basically full-service hospitals but on a smaller scale.

 

Expansion of Existing Sites

Another alternative for health systems looking to expand is opting for the expansion of an existing site, rather than an entirely new facility. This is often a budget and schedule saver and therefore advantageous to the health system. This allows the hospital to expand service in an already known location rather than selecting and purchasing a new site.

Related- Re-Purposing Healthcare Space

 

Health System Consolidation

There will be fewer independent hospitals and health systems in the next several years. Deloitte expects half of the non-government health systems will exist by 2024 and there will be no independent hospitals in 2024.

 

New Leasing Agreements

New accounting rules have been set up by the Financial Accounting Standards Board that will have a dramatic affect on how providers structure their leasing arrangements. These new rules go into effect in the next 2-3 years and will give providers less flexibility on how they classify their leases. Under the new rules, leases will be classified as financing leases, which functions more like debt on the lessee’s balance sheet. These rules have both healthcare providers and real estate developers re-thinking their options.

 

Increase in Rehab Hospitals

As a way to avoid readmission penalties for preventable conditions, more health systems are considering increasing their rehabilitation services. We may see health systems partnering with experienced rehab hospital operators in order to provide improved post-discharge patient care.

Katie Craven
Katie Craven is Marketing, Communication and Brand Manager at Watchdog Real Estate Project Managers, a real-estate consulting firm that provides owner’s representation and project management services. More about Watchdog Real Estate Project Managers as well as additional blog posts can be found here.
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