News
HEALTHCARE: MERGE OR BUST
August 23, 2012
| Yesterday at Bisnow's Baltimore Healthcare Real Estate Summit, panelists said the metro area's hospital systems compete and collaborate (Johns Hopkins and U. of Maryland co-own Mt. Washington Pediatric Hospital). The hope is that the Affordable Care Act's encouragement of huge hospital systems doesn't turn Baltimore's frenemies into enemies. |
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| Foulger-Pratt Rockledge Medical Properties prez Mike Abrams (here with Cassidy Turley's Jay Wellschlager) says healthcare is developing its own base of capital from institutional investors, rising to the prominence of other major real estate asset classes like industrial and retail. (Welcome to the big people table.) The tenant base helps, considering hospital systems dominate medical office occupancy. Plus they're buying up their brethren—take MedStar's plan to buy the Southern Maryland Hospital Center in Prince George's County. |
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| 150 of the Baltimore/Washington region's healthcare hot shots joined us at the Four Seasons. Mike's Rockville-based firm has just formed a JV with Prudential to recap its 600k SF Baltimore/DC portfolio and expand it with both on and off-campus MOBs. |
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| Johns Hopkins Medical Management prez Gill Wylie (flanked by Colliers Baltimore managing director Kevin Haus and A/I/Data prez Michael Maguire) has overseen a big expansion. Johns Hopkins Medicine rebuilt 70% of its East Baltimore campus for $1.2B and bought the 100-acre Bayview Medical Center, and he says they may even merge into one hospital with two campuses some day. (Two medical centers living together as one is the plot of Sondheim'sBed Side Story.) Gill's organization also bought Howard County General, Bethesda's Suburban Hospital, and DC's Sibley Memorial Hospital and merged with Tampa's All Children's. Still, he says, the future isn't about being the largest system but rather reaching out into the communities through physicians' offices, pharmaceutical offices, and clinics. |
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| HPRG founder Chuck Feitel says all DC and Baltimore hospital systems, except Holy Cross and Reston, have gotten on the community outreach bandwagon, and that means MOB demand. Chuck, by the way, has a family company on his hands. His wife and daughter work with him, and he says his son is soon to join. Remember, guys, no work talk at the dinner table; it's not healthy. |
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| Talk about frenemies. NexCore Group's Mervyn Alphonso and HCP's Christian Weber both work for big pure-healthcare owners. Christian agrees with his fellow panelists that the proportion of hospital-affiliated physicians to private physicians is skewing heavily toward hospitals. An individual joins a physician group, he says, which joins a super group or a hospital, and the smaller hospitals join up with the larger ones (enter the Circle of Life). |
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| IA Interior Architects' Peter Notari says those outpatient centers everyone's talking about have new spec needs. As hospitals trim the services provided at their main buildings, the patients who go to outpatient centers are sicker. If doctors are doing procedures there, does the facility have a good drop-off zone, for instance? (Valet parking is one solution that's rolling out.) |
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| Zenith Capital Holdings CEO Mike Gibble (who's also CEO of healthcare-focused HTB Architects and sits on the boards of cloud-based medical records firm EnableDoc and Health Trends Research) says no matter what follows from the Affordable Care Act,entrepreneurs will find opportunities to help physicians. |
