Real estate strategies change with healthcare landscape

0 CommentsBy

June 28, 2018


The shifting healthcare landscape is pushing real estate strategies outside traditional settings.

Conventional approaches to real estate are proving too costly to keep up with both rising demand and compressed reimbursements. Moreover, technology advances and shifting consumer preferences are increasing demand for easier access to care in lower-cost settings in communities.

Over the last 20 years the healthcare industry has migrated from inpatient-centric care to outpatient-focused delivery models. Today, the $1 trillion healthcare real estate market is more diverse than ever, with outpatient facilities and MOBs accounting for 39 percent of the healthcare real estate market value, followed by hospitals and senior housing at 31 percent and 15 percent, respectively.

While hospitals remain a crucial piece of the puzzle, the hospital-centric model of traditional healthcare delivery has given way to a network of medical office buildings, healthcare-anchored retail centers, surgery centers and other healthcare specialty buildings, which are often less expensive to construct and operate than traditional hospitals. Outpatient delivery methods can also provide a simplified experience – reducing wait times, limiting the risk of infection and streamlining medical costs.

The benefits of more diverse offerings for care are fueling a swell in off-campus locations. By year-end 2018, a full 73 percent of medical office building construction will be in off-campus locations. Moreover, freestanding emergency rooms, urgent care and walk-in clinics are already proliferating in valuable retail locations and will continue to do so.

For more about evolving real estate strategies and other healthcare real estate trends download our 2018 U.S. Healthcare Outlook.