Accessing growth
Even for doctors”™ offices, it”™s all about location and pairing up with the right practice.
“Access, convenience and the economy are all directly related to how willing people are to seek care locally,” said Sheryl Coughlin, head of research for Deloitte”™s Center for Health Solutions in Stamford.
According to Sean McDonnell, executive vice president and head of the Stamford-based Rhys real estate”™s Medical Division, hospitals traditionally built their medical office buildings around their campus, having the communities come to them for their health care needs.
“Now we are seeing the trend of hospitals going to the communities,” McDonnell said.
“Hospital strategies also include inserting their own physicians into those facilities and master-leasing the sites which accomplishes several things,” said McDonnell. He said it ensures referrals, maximizes efficiency and productivity and allows control over the types of tenants.
Joe Simone, president of Simone Development in the Bronx, has been engaged with health care real estate and development for more than 20 years, taking part in projects in Westchester and Fairfield counties. Most recently Simone has begun a medically focused project on Putnam Avenue in Greenwich.
A health care location, like retail, needs an anchor tenant, Simone said
“For health care it”™s about creating complements. There”™s a reason in retail a coffee shop works near a clothing store. It completely relates to costs and how busy people are these days. There needs to be an element of convenience.”
Simone said a retail approach to medical specialties is a formula grown of necessity.
“It”™s advantageous for the doctors as well as the patients,” he said. “But to create one of these projects you have to know what you”™re doing and what the medical world is looking for.”
McDonnell said health care projects are strongly demographically motivated; he said the great majority of the Fairfield County health care market is driven by child health services.
“Here pediatric specialty groups are placed near OB/GYN”™s and external medicine.”
McDonnell said often anchor doctors have an idea of the specialty they”™d like to be paired with and often offer up direct referrals.
“When we go to look at the development of a project, the first thing doctors ask is, ”˜Who else is coming in?”™” said McDonnell.
“It needs to be accessible, have the right zoning, ample parking and infrastructure,” he said. “You can look at some sites and think they are perfect and suddenly you don”™t have the floor or power loads to support large, thousands of pounds of equipment. It can be hard to find the good bones that you need to start a project.”
McDonnell said with construction and land costs dropping, the market is becoming a bit more approachable.
He said the best prospects for such projects are nonperforming retail and residential locations with some amount of underperforming office space.