We are taking a break from our regular briefing this week to focus on a list of trends we are seeing in the market. Take a look at our list—if we didn’t cover a trend you are seeing in the market, send us a note. We always enjoy hearing from our readers. As always, if we can be of service to your organization, please do not hesitate to reach out.

  1. Alternative Financing Solutions – Hospital systems are increasingly focused on exploring alternative financing solutions for new building projects or to finance the acquisition of assets they have leased for many years. The most popular forms of financing we are seeing involve credit tenant leasing or the use of nonprofit foundations to source taxable and tax-exempt debt.
  2. Energy Solutions – Hospitals consume large amounts of energy and are often looking for ways to drive down operating costs. We are seeing more hospitals explore solar arrangements. We are also seeing energy-as-a-service transactions to fund improvements to physical plants.
  3. Workforce Housing – Hospitals are looking for ways to keep and retain clinical workers. In many markets, the lack of affordable housing near the hospital creates workforce retention issues. Hospitals are looking for ways to partner with developers to create affordable workforce housing on or around their campuses.
  4. Urgent Care Centers – Hospitals are making another push to develop and acquire urgent care centers in order to expand their outpatient footprint. Data from recent transactions suggest that urgent care centers can help hospital systems grow market share and add to the bottom line while reducing inappropriate use of the emergency department.
  5. On-Campus Partnerships – Hospitals are working hard to lure ASCs, specialty hospitals and MOBs on campus. We’ve seen a growing trend of hospital systems looking for ways to partner with other providers using on-campus development projects as a way to create a long-term relationship.
  6. Joint Venture Specialty Hospitals – Nearly all of the new ASC and specialty hospital projects we are seeing in the market are joint ventures between hospitals and specialty providers. We have seen a lot of new activity around ASCs, behavioral hospitals, cancer centers, children’s hospitals, spine centers and inpatient rehab hospitals.
  7. Land Banking – Hospitals around the country are snapping up large parcels of land for future campus relocation projects. Over the past five years, a number of large hospital systems have commissioned long-term facility plans that involve building new hospital campuses. As a result, they are looking for anywhere between 50 and 200 acres for new campuses.
  8. Political Uncertainty – National politics (tariffs in particular) are making it difficult to pin down construction costs for new building projects and are creating uncertainty in the bond markets. Both could have a cooling effect on new building projects.
  9. Construction Costs – Construction costs are off the charts in a number of markets around the country, making it difficult for providers to justify new projects.
  10. Property Taxes – Property taxes are a significant operating cost for many for-profit hospital operators. A number of hospitals have noted that property taxes have increased as a result of rising property values. Nonprofit providers, who are often exempt from property taxes, are battling with local municipalities to preserve their property tax exemptions.

For questions or additional information, please contact:

Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.

The post Weekly Hospital Real Estate Briefing: Top 10 Real Estate Market Trends We’re Tracking appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.