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Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
Colliers Medical Office-Update
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Colliers Medical Office-Update

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Colliers International US Medical Office Update 2014

Colliers International US Medical Office Update 2014

Published in: Real Estate
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  • 1. Medical Office Update (US) Andrea Cross, National Office Research Manager | USA John Wadsworth, National Director Healthcare Properties March, 2014
  • 2. 2 About the 2014 Medical Office Outlook Report Colliers’ first-ever national medical office report Collaboration between Colliers Healthcare Services Group (CHSG), U.S. Research team and local market researchers Report supports CHSG’s activities by establishing Colliers as a thought leader in the MOB space Features healthcare industry overview, key healthcare real estate trends and investment market outlook
  • 3. About the 2014 Medical Office Outlook Report Features detailed market-level statistics for 39 U.S. markets Key differentiator from reports produced by our competitors More markets to be added in future iterations of the report 3
  • 4. What Are the Key Drivers of the MOB Market? #1: Aging Baby Boomer Population 4
  • 5. What Are the Key Drivers of the MOB Market? #1: Aging Baby Boomer Population 5
  • 6. What Are the Key Drivers of the MOB Market? #1: Aging Baby Boomer Population 6 Annual number of physician office visits 70% higher among 65-74 year-olds than 45-64 year-olds.
  • 7. What Are the Key Drivers of the MOB Market? #2: Affordable Care Act (ACA) 7 U.S. healthcare costs highest in the world by a large margin Goal of ACA: insure more people while achieving lower-cost, more successful outcomes
  • 8. What Are the Key Drivers of the MOB Market? #2: Affordable Care Act (ACA) 8 Electronic Health Records (EHR) requirements being phased in to improve provider coordination
  • 9. Healthcare Industry Employment Trends 9 Outpatient, home health care employment driving overall healthcare employment.
  • 10. Healthcare Industry Growth Widespread Across Geographies 10 Large, in-place older populations supporting healthcare demand in Northeast and Midwest.
  • 11. Healthcare Industry Growth Widespread Across Geographies 11 Above-average population growth driving healthcare demand in South and West.
  • 12. What Do These Trends Mean for MOBs? 12 MOB vacancy rate remarkably stable despite uncertainty caused by ACA.
  • 13. What Do These Trends Mean for MOBs? 13 Construction activity down significantly in recent years.
  • 14. Retail Space Conversions Sources: ULI, Kaiser Permanente
  • 15. Open Layouts Sources: ULI, Davis Partnership/Align Healthcare
  • 16. MOB Performance by Market 16 Small, southeastern markets top the list: strong demand, little new supply Overbuilt Sunbelt markets starting to recover
  • 17. MOB Investment Surging 17 Q4 2013 MOB investment totaled $2.47 bil., approaching Q4 2006 peak, cap rates trending down.
  • 18. Cap Rates Trending Down 18 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Q1 '06 Q3 '06 Q1 '07 Q3 '07 Q1 '08 Q3 '08 Q1 '09 Q3 '09 Q1 '10 Q3 '10 Q1 '11 Q3 '11 Q1 '12 Q3 '12 Q1 '13 Q3 '13 Medical CBD Suburban Note: Latest data as of Q4 2013 Source: Real Capital Analytics
  • 19. Links CHSG: http://www.colliers.com/en-us/us/healthcareservices US Research: http://www.colliers.com/en-US/US/insights MOB Report: http://www.colliers.com/us/medical-1H Contact Info Andrea Cross National Office Research Manager | USA Direct: 415.288.7892 Email: andrea.cross@colliers.com CI_AndreaCross 19
  • 20. 20 Colliers International Healthcare Services Group Specialized Real Estate Solutions Presented by: John Wadsworth National Director An Introduction to…
  • 21. Colliers Healthcare Services Group (CHSG) Overview Formed in 2005, “Organically Grown” 76 members in US 34 markets, London and Hong Kong Service Offerings:  Brokerage  Property Management  Valuation & Appraisal  Project Management  Market Research  Strategy & Consulting $1B in Gross Transactions 2013 Key Differentiator: CHSG is Healthcare Real Estate Solutions Provider: “If you are in the healthcare real estate business, by default you are in the healthcare business”
  • 22. Patient Protection and Affordable Care Act, aka “Obamacare”… 22
  • 23. ACA Impacts on the Healthcare Industry, Resulting Trends: March 2010 present: Major shift in US healthcare delivery system Fee for service fee for quality Healthcare “consumer“ driven Lower payments (reimbursements) from the Feds & Insurance Companies New pressure on Hospitals/Providers to:  Cut cost / Improve quality  Coordinate care for better outcomes  Preserve margins via savings (vs. more revenue) Mandate for efficiency = Massive healthcare industry consolidation 23
  • 24. Hospital Mergers and Acquisitions  5,000 hospitals in the US  2012: $143B in healthcare M&A  2013, topped 100 mergers US Physician Consolidation  2000: 682,470 physicians in the US / 57% independent  2013: 792,594 physicians / 36% independent 24
  • 25. 25 Shift in Tenant Profile Flexibility In-patient to out-patient: higher acuity care moved to the MOB setting Hospital driven monetization Repurpose of non-medical assets to medical facilities Regulatory Compliance ACA Impact on Healthcare Real Estate, Resulting Trends:
  • 26. Challenge 170,000 SF, 176-bed “dark” acute-care hospital 1970’s construction / compliance with CA seismic standards Find a new hospital operator to re-use the facility vs. redevelop Healthcare Reform Strategy Determine feasibility / cost of re-use of existing building Position as re-opportunity to comply with HC Reform Perform need/gap analysis for full “continuum of care” Roadshow presentation to prospects Success Story Century City Hospital, Century City, CA
  • 27. Success Story Century City Hospital, Century City, CA Results Secured a provider with a need to develop an “acute-rehab” facility Building re-purposed / modernized to comply with licensing req’s Partnership between UCLA, Cedars Sinai and Select Medical Executed 17 year, $80M lease
  • 28. 50 acres / 1.2M SF Full continuum of healthcare to be developed CHSG awarded assignment in 2013 to market, lease and sell Current Project Canyon Springs Healthcare Center 28
  • 29. How can you partner with Colliers Healthcare Services Group? Step #1 – know that CHSG exists, is “healthy” and expanding! Leverage CHSG platform to pursue HC – “b/c you don’t understand it, don’t ignore it” Expand service offerings (beyond brokerage) to existing healthcare client Collaborate! 29
  • 30. 30 “We take our job seriously…”
  • 31. Medical Office Update (US) Andrea Cross, National Office Research Manager | USA John Wadsworth, National Director Healthcare Properties March, 2014

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