ATLANTA, Feb. 28, 2014 /PRNewswire/ -- Just as the delivery of healthcare is rapidly changing, so is the landscape for healthcare real estate.
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Increasingly, services are being offered at locations separate from the hospital. That's presented realignment challenges and opportunities affecting new construction, repurposing of existing space, and physician group acquisitions.
Steven Kaye, a partner at Arnall Golden Gregory who co-chairs the firm's Real Estate Practice and is co-leader of its Healthcare Real Estate Team, moderated a panel discussion on this evolution at Bisnow's 4th Annual Atlanta Healthcare Real Estate Summit, held at the Ritz-Carlton in Atlanta's Buckhead neighborhood. More than 250 people attended.
The panelists, representing healthcare providers, brokers and investors, were: Chris Kane, WellStar Health System; Robert Simmons, Piedmont Healthcare; Todd Perman, Newmark Grubb Knight Frank; Mike Noto, Health Care REIT; and Stefan Oh, Griffin-American Healthcare REIT II.
Mr. Kane and Mr. Simmons noted that WellStar and Piedmont are investing in off-campus healthcare properties that provide hospital services "without the beds."
Investments also are being made in smaller real estate spaces, which then might be consolidated into midsize facilities.
Mr. Noto observed that this shift away from hospital-centric care creates a new challenge for hospital owners. "I continue to look at those beds in the mother ship and ask, 'What do we do?'"
Mr. Perman said repurposing space is now more data driven than ever before. Questions such as "What patients do we want?" and "How do we want to serve the community?" are being asked.
Demand for healthcare real estate is greater than the supply, with plenty of cash-rich institutional and non-institutional buyers looking to invest. Mr. Oh said the cap rate for off-site buildings is generally higher than for buildings at a medical complex, but the gap is narrowing given the credit backing provided by health systems.
The panel discussed how a health system's acquisition of a physician group is complicated by that group's real estate ownership or lease. One particularly challenging scenario is when only some of the physicians in the group own the real estate, resulting in an uneven division of the proceeds from the acquisition.
Other Arnall Golden Gregory attorneys attending the event were Hedy Rubinger, chair of the Healthcare Practice; Steven Pepper, named the 2012 Atlanta Real Estate Law Lawyer of the Year by Best Lawyers; Robert Dow, former vice-chair of the Corporate and Securities Practice and a CPA; Scott Shuman, co-leader of the Healthcare Real Estate Practice; David McAlister, a partner in the Real Estate and Leasing Practices who focuses on sophisticated transactions; Mindy Planer, a Real Estate partner who focuses on financing; and Jessica Grozine, a healthcare associate who frequently writes about healthcare topics.
Media contact: Kevin Duffy, 404-873-8131, email@example.com
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