Challenge of Placing Medical Malls Within Aging Community Hospitals

We are being asked to analyze partially vacated or shuttered hospitals for so called ‘medical malls’, or integrated ambulatory care centers. It is extremely difficult to make this work. These buildings are a nightmare to rehab and when it is all said and done you pay close to new construction costs for a very compromised design, and a patient unfriendly environment (especially if patients are arriving at an otherwise shuttered campus). It is not to say that there are not opportunities out there, but we have been engaged to investigate a number of them and mostly failed to make them work operationally or financially.

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In addition, when financing projects in today’s market, we undertake an ‘alternate use’ analysis in the event of a default by the tenant or owner. Lenders will be scared off of putting money into a dinosaur building with no alternate use without other performance assurances.
 
Alternatively, what we are looking at is the ever growing stock of big box retailers that are closing their locations (eg.s Circuit City and Linens & Things). These locations are perfect for ambulatory care centers and physician clinics: simple box buildings, a sea of parking, fabulous locations, etc. These retailers paid top dollar for the best sites in the country over the past decade. We are developing a number of projects with this approach.
 
Mr. Amormino (jamormino@ambdevelopment.com) is president/CEO of American Medical Buildings, a provider of full-service, medical office and ambulatory care planning, design and development. Learn more about American Medical Buildings.

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