Medical Real Estate Development: Location and Site Analysis

The analysis for a location and site are two separate parameters for which to search for developable land to hold commercial real estate structure. Each type of commercial use, and each specific user, will make special demands for location and site. Access to main thoroughfares may be important to office, retail usage, while population or housing density for apartment usage, or proximity to rail lines or airports for industrial use. Medical location and site analysis tend to combine several of these factors, while consistently rely on proximity to other physicians, hospitals, surgical centers and ancillary services.

To consider a medical location and site in general terms, without specific medical use in mind, a seasoned developer, or user, will look at the following features and devise a way of rating each.

Features for Location Analysis
.
Physical
  • Natural Boundaries and Barriers
  • Manmade Boundaries and Barriers

Usage Patterns

  • Growth Areas
  • Traffic Flows
  • Regulations and Controls
  • Incentives
  • Tax Structures
  • Community Master Plans

Qualitative

  • Neighborhood Image
  • Community Attitude
  • Location Image
  • Surrounding Users

Linkages

  • Employment Centers
  • Retail / Restaurants
  • Road Network
  • Transportation and Shipping
  • Residential Areas
  • Labor Pool
  • Educational Facilities
  • Recreation
  • Customers
  • Municipal Services
  • Utilities
  • Competition

Supply and Demand

  • Population
  • Employment
  • Income
  • Wages
  • Expenditure Patterns
  • Absorption/Vacany
  • Real Estate Prices
  • Competition
  • Traffic Count
Features for Site Analysis
.
Land
  • Size and Shape
  • Front Footage
  • Soil Composition
  • Topography, Slope and Drainage
  • Vegetation
  • Buildable Sites
  • Engineering Requirements

Access

  • Side of Street
  • Medians and Curbs
  • Turn Lanes
  • Deceleration in Acceleration Lanes
  • Traffic Controls

Economic Factors

  • Price and Acquisition Costs
  • Development Costs
  • Taxes
  • Development Fees to Community
  • Municipal Services

Regulatory Factors

  • Zoning
  • Maximum Building Area
  • Required Parking
  • Environmental Issues
  • Permits and Licenses
  • Applicable Building Codes
  • Special Requirements (Buffers, Retention, Etc.)

Qualitative

  • View
  • Appearance

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Tenant Needs Within A Medical Office Building

waiting roomAs a truism, the quality of a medial tenant will have a significant bearing on the process of procurement or assignment of healthcare real estate space. This is especially true when considerations are addressed for a tenant that is renewing, expanding, contracting, or relocating within a medical building.

In each circumstance, the overall design of the facility and potential costs associated will account for whether the leasing process will be simple or challenging, on a relative scale. With this in mind, a healthcare real estate advisor has the ability to influence the process positively due to their unique concentration within health care and commercial real estate.

The Renewal

Upon the majority of renewals, the size and layout of the medical office is not altered and the suite design or reconfiguration is avoided. Other times, tenants will request these or other modifications to their space.

Typically, a broker will request the approval of the landlord to determine how the costs will be distributed and who will be responsible. In some cases, the landlord will have budgeted this expense and can absorb the costs. But, most of the time, they will not. Thus, a certain percentage of the cost will be provided. In other cases, the tenant will be responsible for all modifications.

Rental market conditions should dictate who assumes financial responsibility for alterations. To determine market conditions, a good barometer procure a specialist that is educated on the short term availability and effective price of comparable lease space.

The Expansion

Expansion is typically a costly and difficult undertaking for medical tenants. This, due to the increase in overall space, and consisting of additional construction costs, as well as management and accounting requirements. For a tenant to address an expansion request properly, the expenses need to be determined beforehand to limit the administrative liability associated with the request. Space planners or property advisors are very helpful for this logistic exercise. Again, and similar to renewal, the determination of costs should be based on comparable rental market conditions.

One of the main reasons tenants relocate is because their existing floor plan no longer meets the functional needs of the user. Thus, the requirement of expansion should be addressed prior to conclusion of lease. Running up against deadlines will not expedite or provide leverage for expansionary discussions.

If expansion is required in the midst of tenancy, commonly, the lease term will be extended for additional years. Under this circumstances, the costs will be attached to an amended lease and rate will be blended. Another potential outcome may be the continuation of the existing lease and expansionary space rental separated. The former homogenized term typically will favor the landlord, but is generally accepted in investment real estate.

The Contraction

A healthcare space contraction may become necessary because of several factors. Most commonly, it occurs with reorganization, subsidiary or referral base relocating, financial constraint, or regulatory requirement. While this pressure creates an uneasy position for the tenant, the landlord has the potential to react positively through status review.

If contraction request is made by the tenant during the midst of the lease term, a subletting consideration should be addressed via all parties to the original lease. Alternatively, if the contraction request is made towards the end of tenancy, the tenant’s advisors should be aware of the potential re-use of space, any limitations in plumbing or electrical, and costs associated with construction. An expert opinion for the effective contraction of space should be sought.

The Relocation

Too often a medical tenant will need to expand but the adjoining spaces will be occupied. Within most leases, a relocation clause exists that allows the landlord to, essentially, move a tenant into an alternate space. For expansionary needs, this clause may be utilized effectively by the landlord, while hesitantly by the expansionary tenant. To alleviate tenant concerns, the expansion space may include space planning costs, moving expenses, additional rent, and tenant improvements with above standard features.

Customarily, relocating within the building has challenges, but specialized relocation experts can be of considerable service to a landlord or tenant within medical space. The impact of change, via relocation, within or away from a desirable situation, has unique ramifications to both parties to the lease agreement. Understanding the advantages and disadvantages of relocation within a building will provide confidence when addressing landlord/tenant responsibilities.

Planning a Medical Real Estate Development

Land development for the purposes of building a facility is a complicated process with several stages involving multiple parties and encompassing many financial risks. The process consists of a series of actions from that of land purchase to leasing, construction and sale, but most of the items that pertain to development occur prior to land acquisition.

While the process of healthcare real estate development planning will differ based on medical type, the preferred series of events is one which eliminates risk early through pre-construction commitments for leasing, permanent financing and potential final sale. Prior to initiating the development process, it is necessary to analyze how the development will assimilate into its market. Planning for a medical development requires the consideration of these general principles:

Land Analysis – A potential medical development site has physical characteristics that make it more or less adaptable for a specific use. These include the terrain, dirt composition for land, its shape and size, accessibility, neighboring residential areas and appearance of surrounding land uses.

Planning Commissions – Zoning and city planning will limit certain types of medical development that may be permitted or refer to the process for change to these requirements. An aspect for the approval of a project consists on how the community will accept the development and what will be received in terms of quality, appearance and use. In most cases, developers will be required to identify who the principals are and how approval and how the structure is arranged for project completion.

Market Analysis – Because the market ultimately determines the success or failure of the developed medical project, initial planning should assess demographics, patient or trade area, competitive projects and supply of demand.

Financing – Identifying the potential lenders, equity participants, terms and interest rates, along with the developers level of participation should be outlined early in the process. All too often the original plan is modified or entirely changed by lending requirements.

Uses – While specialized medical development is difficult to reconfigure for alternative uses, determining whether the facility may be re-adapted easily should be outlined early.

Site Selection – Consideration for the medical site’s capacity should includes tests of layouts and site coverage arrangements required by zoning and certain users. Analyzing parking areas, access roads, utilities, floor and common area ratios and building-to-site ratios are specific requirements that will alter the original development.

Highest and Best Use – A few tests may help to determine the feasibility of a medical development for a certain area. Whether the development is physically possible, legally and economically achievable and maximally productive should be applied to the site analysis. This examination should take into consideration development costs, assumptions for financing and potential revenues, and subject to multiple variables.

Development Plan – The healthcare real estate master plan embodies the assemblage of land, the layout of the development and its phases, parcel configuration(s), and ingress and egress from on and off-site components.

Visual Identification – Initial architectural drawings and graphic layouts of the medical project should be prepared to illustrate the results of each item within the master plan.

Financial Proforma – With the specific items and costs identified, the planning unit must ready a financial projection that chronicles such costs, the project’s funding sources, project revenues and investment returns for the entire project.

Marketing Strategy - The marketing procedure chosen for the project will help to identify the project’s place in the market. It will highlight the themes of the marketing plan and provide a strategy for marketing implementation to ensure the success of the project.

Implementation - Lastly, the itemized agenda includes all of the development steps, time management goals, the members to the development and responsibilities of each.

In January 2013, MREA will highlight the process of securing, permitting, construction and potential sale of a medical real estate development. If you have not already, please click the orange RSS icon at the top right of this web log to have our posts delivered to your inbox or preferred reader.

Building a Medical Facility

Building a healthcare facility from scratch, similar to modeling a custom home, offers an opportunity to control the entire design to fit the particular needs of the medical provider. While the list of preparatory items is long and requires adequate time allotment and abundant resources to carry out, the opportunity, as part of a rebranding strategy is tremendous.

First, we suggest engaging a firm that is focused on relationships within the healthcare real estate sector. No, this does not entitle a medical professional to utilize a proprietary database to forge relationships independently for purposes of pitting one qualified real estate service provider against another. Rather, it allows for the opportunity to streamline the development process for the purposes of time expediency and future financial gain.

For small to mid-size healthcare providers that are initiating contact with real estate developers, it is vital to seek a real estate group that is knowledgeable in land management. Issues such as utility needs, zoning restrictions, detention requirements, along with developer demands and building or regulatory stipulations can quickly overwhelm these providers, especially if exhaustive planning was not prerequisite. Other items such as locale, comparable developments, leases or sales should be documented, and client, whether specialist group or primary care, should be made aware.

For most specialist physician groups, geographic awareness is an integral part of the entire value equation. The need to be within close proximity to a hospital or medical center is routinely the highest priority. Certain specialties will seek companionship with the hospital for benefits that are simply too costly for stand alone facilities that do not experience a high volume of patient care. Thus, seeking land or redevelopment opportunities that are well situated near hospital system is imperative.

As for primary care, locating within, or contiguous to, a hospital is not as important, especially if access is provided to hospitalists. Family practice organizations, which are now in highest demand by patients, specialists and large healthcare systems, are realigning themselves within medical centers for physician growth, referral and patient demand. This, especially as the financial incentives are too lucrative to ignore. To remain independent, some family practice physicians are seeking space in alternative uses such as retail centers or condominiums.

A unique development opportunity for healthcare providers is that of medical condominiums. This assemblage, or community, of buildings offers healthcare providers an opportunity to realize the equity and tax benefits of real estate ownership. The demand by physicians seeking such opportunities outweigh those pursuing traditional medical office space 2 to 1 these days; convenience taking precedence over compartment.

While this style gained favor in the medical community throughout the last decade, several medical providers have engaged our firm to assist in expansionary endeavors. As condos are built a certain size, the shape typically cannot be reconfigured. Also, condominiums are commonly built with unique features that are non standard. Any proforma sale analysis will have to include a longer sale schedule or reduction in price relative to added, exclusive amenities.

As specialized consultants that are unique to the commercial real estate industry, our assignment is to help chart the course for smooth sailing. We will assist healthcare providers through our unparalleled database of contacts and relationships. By streamlining the development process and assisting with routine financial and market surveys, we will minimize the risk of the provider while adding significant contributory support and value to the final product.

The Leasing Process: Medical Office Building

Of utmost importance to a medical building’s ultimate success is the recruitment of physicians. For medical office projects, our group will complement management, administration or business development to embrace and add value to the overall objectives of each project. Because we are acquainted with physicians, to which we have lent our professional lives, MREA maintains a vast working knowledge of how each medical business is positioned within Texas’ commercial real estate landscape.

Along with dedicated research, our leasing unit has developed a proprietary leasing program that connects physician specialties, their locations, potential hospital affiliations to assist in determining the size, location and ideal tenant mix within medical office buildings. Furthermore, our medical real estate leasing specialists are actively engaged in the process. We take note of the objectives for each MOB project and tailor marketing strategies, advertising, and public relations campaigns to champion physician prospects for each available space.

Our healthcare real estate group begins each assignment with purpose and direction which involves:

    • A thorough understanding of the medical office market which includes competing hospitals, physicians, medical services, rents, operating expenses, improvement allowance, concessions and limitations.
    • A firm comprehension of hospital healthcare delivery objectives such as use restrictions and tenant mix to determine how a medical office will meet the needs of the prospect with respect to the competitive landscape.
    • Developing a plan of action based on a set of facts, assumptions and the objectives of stakeholders and comparing those to present market conditions.

This exhaustive analysis is essential to the most successful medical office projects. Our healthcare leasing unit’s preliminary due diligence enables our organization to properly position any property in the market to meet client objectives, as well as physician needs, all while preparing for future negotiations that will exist.

Because there are several parties involved in a successful medical office leasing program, communication is of vital importance. Our communication process involves frequent gatherings with key management, administration or business development executives and a detailed format for briefing on the status of our progress. This proprietary medical office leasing and communications process enables us to track tenant leasing progress, summarize the status of each prospect, provide next steps and assign responsibility. Our reports will provide a snapshot of the available square feet and that which is leased at any given point in time.

MREA is very open and considerate to incoming calls regarding medical office lease projects and would certainly appreciate the opportunity to vie for your existing, future development or acquisition projects.

Determining A Suitable Medical Location

Determination of the ideal, long-term real estate location in the current healthcare environment is challenging because the foundation, where healthcare business and real estate decisions once accumulated, is now shifting. With numerous economic uncertainties on the horizon and questions regarding Medicare and Medicaid coverage and its model of distribution, physician real estate demand is suffering at what is perceived to be a fiscal and legislative bottleneck with a limited few finding fresh strategies for improved long term growth.

With quality, rather than quantity, slowly championing the minds of providers and their  patients, increase to a wider range of access and patient referral options are being explored. MREA is at the forefront of these discussions.

For instance, one area that is of key importance to review is the enterprise’s existing referral base. Our brokerage unit tends to visually distribute these referral sources via location map with tiered monetary importance to highlight relocation opportunities that are optimal for existing, as well as future growth. MREA has identified multiple other methods to best suit a referral-based expansion.

Another alternative for consideration is that of weighing leasing and purchasing. If purchasing real estate to locate multiple businesses, MREA provides an income-to-cost analysis, as well as upfront cash commitments, which are transferred into our firm’ proprietary investment proforma model. We work with several models to forecast future years of income, costs and return on investment which compliments a cost and comparable market analysis for each property.

Leasing may be a better option than purchasing, though. The competition for healthcare tenants from owners/landlords translates into better incentives to lease. It is often that a build-out allowance, deferred rent and aggressive long-term package will exist. The management responsibility and liability concerns are also reduced or eliminated in any tenancy.

Besides these two ideas, the third would pertain to the competition of the organization. Establishing goodwill is no longer merely important; it’s vital. The industry is now plugged in and race for market share is fierce. Whether the competition is from a hospital system, a well-established brand, or independent, understanding what they are (or are not) doing in this environment will help to determine where your organization needs to be focused. Our firm maintains a unique database that highlights the top 5-20 competitors within each specialty in a geographical area and performs routine evaluations on their business and real estate modalities.

These select few location reminders highlight the need for quality healthcare real estate representation. Please contact MREA at 713-701-7900 for all of your medical real estate needs.

Healthcare Real Estate Transactions: A Few Considerations

Healthcare is real estate heavy. Not until healthcare reform was formally introduced were the majority of private and public healthcare providers scrutinizing their swelling real estate portfolios with similar risk assessments and accountability measures as their employee-dense corporate industry peers.

Over the past decade, healthcare providers have increased outpatient care, both close to hospital campuses and, more recently, in retail settings. Inevitably, the growth will have to continue to accommodate the transfer of patients into more efficient care settings. Yet with statistics such as: 1/3 of all hospitals will need to find alternate use, healthcare costs and infections are at an all-time high, and technology rapidly reducing redundancies, any new or adaptive real estate use will certainly be scrutinized.

Given the tremendous task of analyzing a property or portfolio in today’s capital complacent, regulation rich healthcare real estate environment, it is important to note that the potential buyers and sellers of these transactions take note of the following:

Real estate, which may consume up to 50% of providers’ balance sheets, is valued at book value. So, determining the fair market value (FMV) of a portfolio may be difficult without true comparisons especially noting the separate and distinctive build-outs in the field. This lack of transparency typically favors the seller, especially in locations where a lack of supply and pent-up demand exists.

Currently, hospitals with whom we are speaking are more interested in monetization now, than possibly any time in the last decade. Determining what to keep and what to sell is commonplace. With regards to a future merger, the real estate assets are being used as a source of financing for the transaction. Thus, determining the hierarchical distribution of assets as they pertain to compensatory value is necessary. We are noticing that most providers typically sell their weakest ancillary units first. Some buyers may look past their first few purchases for future consideration of a larger portfolio.

Healthcare is very attractive as it holds a high barrier to entry. Large amounts of capital have been raised over the last few years all the while interest rates have been moving lower. This allows providers that are seeking to sell real estate the opportunity of selecting several long term capital partners or buyers at attractive prices, especially when given the credit of the provider is strong. EBITDA’s are certainly shrinking for all medical real estate deals.

To grasp what is moving and why -or- to request a proposal for a property or portfolio, please contact MREA for one of our experienced medical real estate advisors.

Ground Lease Structures, Motivations

A land owner typically has one of several motivations for choosing to implement a ground lease instead of an outright sale for a parcel of land. The most common motivation is to preserve the opportunity to participate in the appreciation in land value over the term of a ground lease without the financial risks of developing.

Other examples exist for the owner where the:

  1. Land has a low basis for tax purposes and owner receives rental payments without having to pay capital gains for the appreciation in value of the property.
  2. Property is encumbered in debt in excess of the tax basis. The owner may want to avoid a sale where such a large portion of the sale proceeds, if not all, will satisfy the debt that the taxes payable will require of the net cash.
  3. Tenant is of quality credit; the owner may encumber the interest in the land to secure a loan to be amortized by the rent payments under a ground lease. This would allow the owner to realize a large percentage of a sale or refinance for liquidity purposes without experiencing adverse tax consequences.
  4. Land owner (i.e. hospital systems), may have concerns over how nearby tracts will be built in the future. Utilizing a ground lease can exert more control over the development than through the use of restrictive covenants through outright sale of a tract.
  5. Land owner may not want to be associated with the development risks of improving the land and, rather, may defer these risks but remain a participant in future income.

The tenant usually has a select few reasons to ground lease.

The most frequent reason for ground lease is not having to obtain the cash for the purchase price of land. This motivation is to avoid having to relinquish the resources necessary for day-to-day business operations within the property. Essentially, the tenant is amortizing the cost of improvements and land payments over a period of time. But, ultimately, the aggregate amount of ground lease rentals will exceed the total of interest and principal payments required to pay for the outright purchase.

As for the structure and motivation, the landlord wants:

  1. Tenant to occupy and pay rent for a long initial term;
  2. To limit the tenant’s renewal options;
  3. Rent payments to be adjusted frequently;
  4. Rent payments to be fair market value (or higher).

The tenant wants:

  1. Obligations for occupancy and rent for a short period of time;
  2. Wants numerous options to renew at rates already negotiated;
  3. No adjustments to rent.

Outside of the healthcare arena, the future of the ground lease and its success in matching interested parties are highly dependent the banking system, who can marry multiple components; land, tenants and developers. Within the healthcare transactional market, we expect that the ground lease will remain a source of control, and competition, for location-centric healthcare providers.

For historical healthcare real estate examples, studies, additional structures or request for attorney assistance, please contact Robert S. “Bob” Lowery at 713.701.7900.

Common Real Estate Needs in Medical Tenancy

ImageThe need for long term tenancy appears to be in its greatest demand in decades. This urgency will rise considerably over the next several years as investors continue to discount vacant property, rather purchasing through banks which typically transact without title objections or past, present or future litigation issues. Another factor that will improve the need for stable tenancy is that lenders are again beginning to support investors by reducing capital requirements in exchange for long-term leased, less risky investment real estate.

Understanding the importance of medical tenancy, as it relates to the stabilization of an asset for purposes of a long term hold or investment sale, also requires a basic understanding of what is standard in its tenancy. This recognition, as well as access to professionals which support the healthcare profession, is key to preservation of a leveraged real estate asset or portfolio.

Tenancy items relative to medical professional are many; most outlined in a lease rider. To keep this blog passage succinct, we have outlined the most common needs below.

Utility expense can be one of the highest cost components of medical occupancy. Practice tenants often have higher utility usage than standard office tenants because many have equipment and hygienic requirements which consume large amounts of utility service. Medical professionals typically consume extra water from examining rooms with sinks. They also may utilize extra electricity from diagnostic or therapeutic equipment that requires more electricity than standard office equipment. Some medical uses, such as surgery centers, require the continuous use of uninterruptible power and, consequently, the extra expense of back-up power generation and data transmitters. Because of these items, it is best for the landlord to seek calculations relative to the variety of medical professionals that are considered for tenancy. 

Medical uses often will limit or require specialized janitorial and waste removal services. Special attention may be provided to medical and infectious waste maintenance and storage. These issues sometimes focus on the method for isolating medical waste and used equipment, the kinds and qualities of waste containers, and the process for removal and disposal of such waste.

Medical tenants will frequently have more intensive water and electric needs. Special machinery and furnishings may require special floor/pad accessories. Equipment may also require special fixturing and unique buildout. If the tenant expects to retain ownership of the equipment at termination of the lease, it be necessary to address this in the lease. Another consideration is to the waiver of lien or security interest in equipment which is owned or pledged, especially if there are hazardous materials involved, which is the case in laboratory and radiology services. The examination rooms in a healthcare facility may also be good only for the single use by the healthcare tenant, with no likelihood of a secondary need by a subsequent tenant. Equivalent issues apply to extra work needed to install and remove ADA accommodations.

Some special medical practices will may require special improvements. Ambulatory surgical centers typically require the need of the first floor. Maternity and birthing centers typically require the closest proximity to reserved parking. Psychiatric centers typically require separate and secured access. Plastic surgery clinics typically require separate and less visible access corridors.

The are just a few of the common needs relative to medical tenancy. For more information or submission of a request for our healthcare real estate services, please contact your MREA representative.

How Will Healthcare Facilities Evolve?

A healthcare facility can embody a large selection of property, from simple medical condominiums and clinics to large, more complex, time-consuming and costly teaching and research centers. Large hospitals tend to have all of the diverse health care types that are often found in free-standing facilities. So, it is important for smaller facilities to send the proper message to its visitors, vendors, patients and staff. It is commonly overlooked, but the appearance of a medical facility provides insight about the organization, as well as the level of care that is administered. Evidence about the level of care begins at the entrance of the facility, the unloading zone, parking areas and direction signs. In most situations, the message sent is one of compassion towards the people who enter. This, and most tend to forget, is also for the employees who service the patients as attitude and behavior will cater respect and goodwill.  As for particulars, to name just a few, the finish, signage, entrance and hallway adornments should be coordinated and security features, visible yet not intimidating. Collective, thoughtful design from third-party may help to ensure the proper first impression is created and sustained.

The design of health care facilities is governed by several regulations and special requirements. It is also affected by lesser publicized circumstances and pressures. The most common of these are workforce shortages, reimbursements, malpractice insurance, physician-hospital relations, capacity, care for the uninsured, patient safety, advances in technology, and patient satisfaction.

Currently, the entire health care system is under enormous pressure to reduce costs AND become more responsive to its patients. The aging population consumes the greatest use of health care services, and, it is well documented that the percentage of the aging population is increasing significantly. At the same time, rapid technological advances, often involving very sophisticated electronic platforms and equipment, make more diagnostic and treatment procedures available to the public, more rapidly than in the not-so-distant past. From a layman’s perspective, information alone should assist to decrease health care costs, yet it is not.  Thus, medical facility designers are under pressure to reduce both construction costs and the costs of their design services, while compressing construction schedules AND still meet the highest quality standards. Not an easy job by any stretch of the imagination.

As cost pressures continue, health care facilities will find themselves in increasing competition for both patients and staff primarily due to a leaner budget. Yet, and it is widely recognized, the facility is one of the top requirements when attracting and retaining the best doctors and nurses, the most successful HMOs and insurance plans, and the most patients. Consumer buying decisions are based on cost, accessibility, quality of service, and, in terms of healthcare, quality of care provided. An aesthetically pleasing facility is a key aspect of the perceived quality of care.

Health care is a labor-intensive industry, and much of its labor is highly skilled and highly paid. Since 60 to 75% of a hospital’s expenses are from labor costs, a design that increases operational productivity or efficiency and reduces staffing needs can have a major impact on the bottom line.

Now, more than ever, the flexibility within a facility is key to keeping it from functional obsolescence in the face of changing needs and technologies. Healthcare facility needs are evolving rapidly, and the direction is difficult to forecast with any certainty. New equipment technologies, new treatment methodologies, changes in diseases, and changes in the patient population base all impact the facilities that house them. Inpatient care is steadily being reduced while outpatient services are growing. There is increasing emphasis on specialize care units and smaller satellite facilities rather than large, centralized facilities.

In the past, communicable diseases were the major health problem, and sanitation or cleanliness was the main characteristic of a healing or therapeutic environment. Cleanliness remains extremely important, but there is increasing recognition of the value of a pleasant, easily-understood, and non-threatening environment for patient recovery.  Good design in the health care setting starts by recognizing the basic functional needs, but does not end there—it must also meet the emotional needs of those who use such facilities at times of uncertainty, dependency, and stress.

The HIPAA regulations address security and privacy of “protected health information” (PHI). These regulations put emphasis on acoustic and visual privacy. While HIPAA does not regulate facilities design, its implications for healthcare facilities may affect location and layout of workstations that handle medical records and other patient information, paper and electronic, as well as patient accommodations. As of April 2012, a cardiology practice agreed to a settlement of $100,000 for HIPAA violation for posting patient scheduling on a public internet calendar (more info here).

As the movement continues from hospital-based acute care to outpatient care that embodies more holistic, preventative, and continuous care items for health and wellness, MREA is uniquely positioned to offer professional, experienced guidance for healthcare providers and lend its vast network of working relationships and real estate opportunities for administrative and investment interest.