MEDICAL BUILDING TRENDS
BIOSCIENCE BOOM: The City of Tempe is developing the city’s first biomedical and technology campus on 18 acres of Tempe land west of the Tempe Center for the Arts. The development team is made up of The Boyer Company, SmithGroupJJR and Okland Construction. When completed, the five-to eight-story buildings will total approximately 1 million square feet.
and many other electronic forms of communicating healthcare diagnostics and data take state-of-the-art technology in buildings and high parking ratios. Signage and visibility – these retail type factors play a large extent for a new Class A medical office development. Proximity to major transportation corridors – important so healthcare providers can offer care easily to patients in all parts of the valley and also is easier for their doctors/providers to travel from one facility to another.
GENTRY: Traditionally MOB’s (medical
office building) have consisted of clinical suites for private physicians, ranging in size from 1,000-20,000 square feet. The MOB’s of today are being designed in a larger footprint with more flexible exam spaces, so that multiple healthcare providers can utilize a single space, since many of the service lines are being delivered by these large groups in one location. Flexibility is the key to the financial success of future MOB’s. 36 | November-December 2016
AZRE: What are the biggest challenges to consider when developing new healthcare projects?
HARPER: Plaza Companies creates a
cohesive development and construction team that plans and designs buildings with a premium on flexibility in access, signage, entry points and parking. It cannot be underestimated the importance of getting all of these factors right. Expectations for preleasing are critical in most commercial office buildings, and that includes medical office buildings as well. It is more complicated for medical groups to commit 18-plus months out for new space. Medical practices also need the ability to be flexible and responsive to new federal regulations, insurance requirements and relationships with healthcare institutions.
EDWARDS: The facilities we need
to support healthcare today are not what we will need in the future. We need to continue to invest in today’s care to keep the enterprise going and
financially successful but also need to invest in the future needs. These don’t necessarily have a good payback today. This is taxing a shrinking capital pool and making project investment decisions very difficult.
JOHNSON: If not zoned correctly,
going through the rezoning and neighborhood “feedback”. No. 2, a developer with a new MOB typically needs to get the building 50-75 percent preleased before they can get financing to start construction. Many healthcare providers don’t want to commit their business by signing a lease when they don’t know when the threshold will be reached for construction to start and a firm occupancy date.
BALE: The biggest problem is what limitations exist that inhibits who you lease to. The pool of available physicians and service providers drops significantly when a developer builds on leased land from a hospital. Also typically they can only lease to physicians who are on staff at the local hospital. The ideal situation is on privately owned land halfway between two or three different hospital systems. Tenants will lease there because there are no restricted uses and providers can serve more than one hospital system too.