Real estate investors look to capitalize on outpatient investment — 5 insights

Real estate investors are looking to capitalize on the fierce healthcare market as outpatient developments continue to surge, RE Journals reports.

What you should know:

1. Access to care and lower reimbursement rates are driving healthcare to the outpatient space, particular to medical office buildings, retail centers and off-campus facilities.

2. A Marcus & Millichap report claims single-tenant medical office buildings are attractive to private and institutional buyers, and that existing affiliated outpatient facilities are selling at a premium with some transactions returning up to 6 percent.

3. Another option for outpatient development is in existing retail space. However, because property owners value these spaces at a premium they often demand hefty redevelopment costs because of competition with other assets.

4. For example, a retail redevelopment that would have cost $65 a square foot years ago, could now be in the $150 range.

5. Despite a burgeoning movement to develop properties closer to consumers, most developers would still develop an outpatient facility on or nearby a hospital's campus, said John Abuja, senior director at Marcus & Millichap.

"It’s not ‘build it and they will come,’" Abuja said. "They’re already there. That’s why most investors, if they could choose, would still rather be on campus or near campus with a medical office building."

More articles on surgery centers:
Number of Medicare-certified ASCs per state | 2019
6 hospitals, health systems opening or planning ASCs
Surgery Partners in 2019: 6 points of strategic growth – de novos, payer partnerships & total joints

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