Growing Demand
Aging baby boomers and shifting regulations have created a greater demand for new and specialized outpatient facilities, particularly in services such as cardiology, oncology, and orthopedics. Over the last decade, patients have spent almost twice as much for outpatient care as they have for traditional hospital care. Procedures that once demanded overnight hospital visits are quickly shifting to outpatient care, where the growing demand is attractive to many developers and medical real estate investors.
High Occupancy, Low Turnover
Doctors, historically, have committed to long-term leases (5 to 10 years) and have much more favorable renewal rates than traditional office buildings. Medical office tenants also tend to spend more capital to install specialty equipment and customize their office, making it burdensome to relocate. As a result, medical office buildings have averaged an occupancy of 92% nationwide as compared with 84% for traditional office buildings.
Increasing Availability
In the past, many institutional healthcare providers had financial incentives, such as cost-based reimbursement systems, to own the real estate related to their operations. As the delivery system for healthcare has evolved, however, providers have increasingly sought to monetize real estate assets and focus the proceeds on new technology, equipment, and services. This creates an opportunity for Ziegler Real Estate to meet the needs of healthcare providers while they concentrate resources on growing their core business.
Efficient Patient Care
Physicians increasingly are seeking to provide a full range of medical services in a single location for the convenience of both patients and physicians. State-of-the-art scanning and detection equipment in a central location can facilitate earlier detection of disease. Likewise, surgery suites in close proximity to physicians' offices allow surgeons to more efficiently schedule and perform surgical procedures, thus improving overall patient care.