The Retailization of Healthcare
Gone are the days of renting videos at Blockbuster, but that empty storefront may be just right for a new doctor’s office or urgent care center. (And if you rented too many Jennifer Lopez movies, you probably need a doctor.) It’s not uncommon to find a medical user in just about every retail project around, we learned Wednesday at Bisnow’s DFW Future of Healthcare Real Estate event at the Westin Galleria.
VMG Health director John Trabold (right, with VMG's Victor McConnell) says Texas has become the test market for the retailing of healthcare because our laws make it easy to build freestanding emergency departments and a variety of ambulatory centers. Site selection teams have turned to retail sites because that’s where you can find people and, most important, people with insurance. He says zoning is already in place for most of these facilities, too. The concept is changing the way things are being done and it’s not likely to slow down.
Health Care REIT SVP Mike Noto (left, with Array Architects principal Marsha Whitt, Turner Construction director Steve Whitcraft and John) says Health Care REIT has done at least three conversions of old retail strip malls into medical projects. Big boxes, like old Walmart and Target buildings that are vacated when the companies build their super-stores nearby, can be easily converted to medical use and they already have great traffic and visibility.
Mike told the crowd of 300 that hospitals are “overbedded” as more procedures are moving from the hospital (with a three-night stay for recovery) into ambulatory centers with same-day discharge. The consequence is declining patient revenues, which forces hospitals to look for more income. One way they’re doing that is by leasing floors of the hospital to independent operators who pay a monthly rent. The hospital can now get a fixed payment where they previously had nothing but empty beds, he says.
Marsha (center, between HDR's Adam Panter and Array's Shane Williams) says when the Ebola crisis struck in Dallas, her phone was ringing off the hook from providers across the country. Most everyone wanted to know how to keep potential Ebola patients isolated – upon first entering a facility – from other patients and staff. Since most MOBs have a reception desk at the entrance, she was looking for ways to identify an isolation room near the front door as ways to find space to store contamination equipment. She tells us 2015 is the year of being more efficient, too. Many campuses are exploring lean processes they can incorporate to be more efficient and cost-effective.
Panel moderator Steve (far right, with his team, Omair Fayyaz, Chase Luft and Kirsten Frazee). Steve says Turner has multiple projects in the works including one for the Choctaw Nation, infrastructure updates on Methodist Hospital in Houston, and multiple stand-alone emergency departments around the Metroplex.
Event sponsor Ridgemont Commercial Construction’s Hector Rivera, Tabette Steward, Jon Pope, Amanda Glassey, Jeff Stucker, Brenda Hickson, Micah Cunningham and Sam Balunda. Jeff tells us Ridgemont was recently awarded a new MOB project in Southlake and celebrated the grand opening for the Texas Health Willow Park integrated health campus last week. There are also several ER facilities and assisted living projects in the pipeline slated to start this spring. Other projects include the CityLine retail component in Richardson and a large industrial expansion in Fort Worth starting in the first week of February, as well as two grocery retail projects that will break ground in Q1.
Event sponsor WLS Lighting Systems' Ken Bronstad, Connie Rounsaville, Earl Fitzsimmons and David Neale. Ken tells us that WLS is introducing a state-of-the-art LED panel that is 98% effective in killing airborne pathogens. The product has already been field-tested for infectious disease control and is in use in at least one Dallas-area hospital. The unit uses UV lights to scramble the DNA of viruses, making them inert.
Ryan’s Judy Cullers and Hudson-Peters Commercial’s Cincha Kostman repped event sponsor CREW Dallas. The duo tells us CREW’s 29th annual golf classic is coming up in April. Last year, the tournament sold out to 136 players from 65 commercial real estate firms. Check in Monday for more coverage of the Future of Healthcare Real Estate event.
