The Doctor Is In: How Should CRE Bring In Health Care Expertise?

When The Connell Co. was looking to add new tenants to The Park, the development firm’s 185-acre live-work campus in Berkeley Heights, New Jersey, earlier this year, it felt that the moment demanded more than the usual marketing messages or amenity packages. To be competitive, commercial real estate needs to offer future tenants assurance that any new space takes employee health and healthcare access seriously. 

The firm’s solution was to look for a medical partner of sorts to help offer healthcare as an amenity. Eden Health, a telemedicine startup that focuses on primary care, will soon open an office on-site. For a small membership fee, tenants can become Eden patients, with access to same-day appointments with on-site physicians and therapists via the provider’s mobile app (the fee is “nominal”; representatives wouldn’t get any more specific). The Connell Co. will sponsor these memberships and pay a portion of the fee, viewing this investment as a step toward what it believes will soon be recognized as an essential amenity for all Class-A commercial properties — comprehensive healthcare. 

“This is a holistic approach to wellness and lifestyle,” Connell Co. Senior Vice President of Hospitality and Marketing Stephen Kilroy said. “Employees can get access to primary care doctors right in the building, as well as simple things like flu shots.”

Having a medical tenant as a selling point, or even the cornerstone of a mixed-use development, isn’t anything new. Mosaic Development Partners has long made healthcare tenants a focal part of its strategy to finance and build community-focused commercial and residential projects. And the so-called wellness real estate trend has grown into an industry estimated to be worth more than $134B, with developers chasing new building standards such as WELL and integrating all manner of chemical-free fixtures and environmental amenities as selling points. 

But Connell’s desire to make the advice and assistance of healthcare professionals part of its offering to clients is different. It speaks to the ways CRE is looking at how to make health access and awareness a best practice and amenity.

Other companies have embraced different means of providing such expertise, often by hiring outside consultants: expensive HVAC upgrades focused on UV light and bipolar ionization, focusing on new cleaning routines, putting faith in new technology to encourage social distancing and even having medical professionals on staff. Crocker Partners, a Boca Raton, Florida-based CRE firm with properties across the Southeast, made news earlier this year when it hired Dr. Walter Okoroanyanwu to be its director of environmental health. 

Earlier this summer, Okoroanyanwu, an epidemiologist with a CRE background, said that while many companies had talked about implementing health initiatives, Crocker sought to implement real changes, charging him with developing strategies and procedures to improve safety and wellness amid the company’s 11M SF portfolio. His main goal was figuring out how to stop the spread of COVID-19. 

“Above all, we want to create a safe and healthy workplace,” Okoroanyanwu said in July. “Every day, COVID virus information is fluid, it’s ever-changing. You need somebody with my background who’s able to follow new information and research and convey it to the employees.” 

While news of new vaccines provided a needed boost of optimism to real estate interests fearful of extended lockdowns and work-from-home directives, it is clear that reopening will be an extended process, vaccine rollouts may take months and months to filter through the population, and even on the other side of the crisis, there has been a fundamental shift in the way tenants think about health and infections risks. CRE firms are and will continue to adjust to this new reality. It raises the question of how firms acquire talent in these fields, and perhaps how they approach marketing that talent, or healthcare amenities, to customers. 

Kilroy said that Connell Co.’s approach is a good fit for the current moment. Hiring a specialist to be in your office is an interesting approach, but he said the real differentiator as workers slowly return to the office will be offering healthcare as an amenity.

The idea is already being adapted quicker for residential settings. In Denver, a high-end wellness-focused residential project, Lakehouse, will feature a “wellness concierge” for residents, and in Miami developer CC Homes is partnering with Baptist Health’s Care to provide on-demand virtual healthcare services to a pair of new developments. 

“Having a real professional at your properties is a great investment, and a cool shared asset,” Kilroy said. “In addition, it’s nice to be at arm’s length when it comes to liability.” 

Connell Company has worked with Eden Health to develop reopening plans that the startup has signed off on. But Kilroy sees the idea of outsourcing and amenitizing health access to be much more palatable.

Earlier this year, a McKinsey analysis of the CRE world’s response to COVID suggested that the pandemic would create long-term behavioral changes, especially around health and wellness and perceptions around safety and work. Investments in sanitizer stations, HVAC and ventilation, and outdoor spaces will be commonplace. The Park hopes to make that a key selling point, installing jogging trails, outdoor workspace, playing fields and outdoor gyms as part of a push to portray their new development as a wellness campus, Kilroy said. 

“The potential new clients considering space at the Park are very interested in this option.”