A surgical entity’s real estate is of paramount importance to its success because, without it, surgeries will not be performed, patients will not be administered treatment and business not conducted. So, when a medical property such as a surgery center becomes vacant for one reason or another, it is necessary that a tenant or buyer formulate a creative new strategy similar to that of when the surgery center was realized.
To ensure that a strategic initiative pertaining to the entire property occurs, a healthcare real estate professional experienced in design and surgery center facility construction will review the plans and inspect the facility as built. Commonly, it will be necessary to include space planners or medical facility contractors to verify the adequacy of the spatial, mechanical, plumbing and electrical systems.
MREA has collaborated with design and construction professionals in an effort to provide several key facility issues that may be considered when purchasing a surgery center.
Updating the Facility
From a buyer’s perspective, a first step is to determine if design regulations have been amended by the accrediting body after the facility was constructed, or, whether the facility will receive exemption under the original approvals. Depending on the property’s location, you may have to update the facility to meet current regulatory standards. Bear in mind, there is a greater likelihood of a requirement to update the center if it discontinued operation -prior- to facility changing hands. Additionally, if you will be seeking accreditation, the requirements of the accrediting agency should be addressed.
More often than not, the updates necessary for a surgical facility to gain accreditation are the leading cause for properties to fall out of favor and remain on the market for a considerable period of time. If considering a vacant surgery center for purchase, a plan will need to be exposed to all principals to assist in dissemination and implementation of such regulatory alterations for the consideration of time and money.
Patient Satisfaction & Safety
If updating is not mandatory, patient safety and satisfaction should be considered when deciding whether or not to upgrade a facility. Whether or not it has been accepted by local authorities, if the emergency power system is overloaded and does not function properly during a power failure, patient safety may be compromised.
The design and condition of the mechanical, plumbing and electrical systems should be evaluated by knowledgeable engineers. HVAC systems can be particularly problematic with respect to regulatory compliance, infection control, patient safety, and physician comfort. Backup power systems should meet code requirements in accordance to regulations.
A common item that is ignored is the continuity of fire and smoke partitions, particularly in concealed locations like above ceilings. These are common targets in life safety inspections and often are the source of deficiencies, especially in aging facilities.
In addition to design issues, the condition of major building components should be evaluated. HVAC equipment, emergency generators, and roofing have finite lives and can be costly to replace. A healthcare real estate consultant will be able to comment on this matter, and may recommend inspections by local maintenance contractors.
A surgery center is designed to serve the capacity of an anticipated case volume. It is necessary to review the plans to determine if the internal facility components such as pre-op stations, ORs, procedure rooms or post-op beds are adequate to support these anticipated figures. Each ratio will differ based on the specialty served at the location.
The average size surgical center is currently around 12,500 square feet and the trend is that they will become more efficiently utilized in the future. As an example, if a medical organization is doing 100 cases a month, more than one operating room (OR) is likely not necessary.
If you should have any questions regarding this material or are interested in leasing or purchasing a surgical center for use or investment, contact MREA at 713.701.7900.