Weekly Hospital Actual Property Briefing: Prime 10 Actual Property Market Traits We’re Monitoring

We’re taking a break from our common briefing this week to concentrate on an inventory of traits we’re seeing available in the market. Check out our record—if we didn’t cowl a development you’re seeing available in the market, ship us a observe. We all the time take pleasure in listening to from our readers. As all the time, if we might be of service to your group, please don’t hesitate to achieve out.

1. Various Financing Options – Hospital methods are more and more targeted on exploring various financing options for brand new constructing tasks or to finance the acquisition of property they’ve leased for a few years. The most well-liked types of financing we’re seeing contain credit score tenant leasing or using nonprofit foundations to supply taxable and tax-exempt debt.
2. Vitality Options – Hospitals eat giant quantities of power and are sometimes searching for methods to drive down working prices. We’re seeing extra hospitals discover photo voltaic preparations. We’re additionally seeing energy-as-a-service transactions to fund enhancements to bodily crops.
3. Workforce Housing – Hospitals are searching for methods to maintain and retain medical staff. In lots of markets, the shortage of inexpensive housing close to the hospital creates workforce retention points. Hospitals are searching for methods to companion with builders to create inexpensive workforce housing on or round their campuses.
4. Pressing Care Facilities – Hospitals are making one other push to develop and purchase pressing care facilities with a view to develop their outpatient footprint. Knowledge from latest transactions recommend that pressing care facilities can assist hospital methods develop market share and add to the underside line whereas lowering inappropriate use of the emergency division.
5. On-Campus Partnerships – Hospitals are working laborious to lure ASCs, specialty hospitals and MOBs on campus. We’ve seen a rising development of hospital methods searching for methods to companion with different suppliers utilizing on-campus improvement tasks as a solution to create a long-term relationship.
6. Joint Enterprise Specialty Hospitals – Almost the entire new ASC and specialty hospital tasks we’re seeing available in the market are joint ventures between hospitals and specialty suppliers. We now have seen plenty of new exercise round ASCs, behavioral hospitals, most cancers facilities, kids’s hospitals, backbone facilities and inpatient rehab hospitals.
7. Land Banking – Hospitals across the nation are snapping up giant parcels of land for future campus relocation tasks. Over the previous 5 years, quite a lot of giant hospital methods have commissioned long-term facility plans that contain constructing new hospital campuses. In consequence, they’re searching for wherever between 50 and 200 acres for brand new campuses.
8. Political Uncertainty – Nationwide politics (tariffs particularly) are making it troublesome to pin down building prices for brand new constructing tasks and are creating uncertainty within the bond markets. Each may have a cooling impact on new constructing tasks.
9. Building Prices – Building prices are off the charts in quite a lot of markets across the nation, making it troublesome for suppliers to justify new tasks.
10. Property Taxes – Property taxes are a major working price for a lot of for-profit hospital operators. Numerous hospitals have famous that property taxes have elevated because of rising property values. Nonprofit suppliers, who are sometimes exempt from property taxes, are battling with native municipalities to protect their property tax exemptions.

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