Medical
Office Building Trends
By William Strong, Riviera Real Estate, Inc.
By William Strong, Riviera Real Estate, Inc.
A study done by the Urban Land Institute predicts that the
United States medical community will have a 19% increase in patients by 2019.
The increase in patient load will be due to two factors:
1.
More patients will have access to care due to
the Affordable Care Act passed in 2010.
2.
As baby boomers age, they will require more
health care visits. On average, people over the age of 65 have 36% more visits
to the doctor.
With 19% increase in patients over the next few years, the
need for medical office space is increasing.
Medical practices are facing financial uncertainty related
to decreasing insurance reimbursements and increased legal compliance costs.
Small medical practices are opting for shorter lease extensions than they have
in previous environments, anywhere from 12- to 24 months. Some physicians are
opting to go on staff for large hospital organizations, choosing a salary
rather than the administrative challenges of running a business.
With the uptick in patient visits and downward pressure on
profits, big medical organizations are looking for ways to reduce overhead.
Therefore, large medical organizations affiliated with hospitals are moving
away from treating patients in hospitals in lieu of more affordable outpatient facilities. In fact, hospitals are even beginning to open
off-site emergency departments in order to ensure better service to their
communities. The locations of the satellite facilities are important, and tend
to be determined either by geography or population density to avoid strain on
individual facilities.
Advances in technology have changed the physical
requirements of medical office space. In an optimal situation, a medical office
space will have the infrastructure to support electronic record keeping. Buildings
need to have Cat 5 or Cat 6 cabling and reliable, fast wireless connectivity with
multiple connection points to ensure efficient office operations. Conversely,
medical offices no longer need large areas dedicated to storing paper files. Medical
practices are looking to fill any extra space with areas that are subdivided to
support physician assistants, other sub-specialties, and separate waiting areas.
In this uncertain environment, it is imperative that medical
practices work with a specialized commercial realtor who has a deep
understanding of the changing landscape of healthcare. Some commercial realtors
specialize further in tenant representation services to avoid a conflict of
interest between landlords and tenants. William Strong, a San Diego commercial real
estate Broker (#1802223), provides tenant representation services for
businesses that need medical office space. Mr. Strong's practice is two-fold:
1.
Finding new medical office space at a fair
market rate.
2.
Negotiating with a tenant's current landlord for
lease reductions that are in line with current market conditions.
Call William Strong at 760-777-2880 for a complimentary
consult today. Or visit www.RivieraREG.com
