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Most recent trends in commercial real estate are due to the two largest generations of consumers: Baby Boomers and Millennials. Healthcare real estate is no exception. Changes in delivery, accessibility and insurance cost will affect real estate investments in healthcare.
With current political and social uncertainty around the future of healthcare, there is a lot of change to come for healthcare real estate. Healthcare providers have begun to use real estate strategically – focusing on reaching more patients as well as improving comfort and quality of care.
One change is the sudden flourishing of urgent care clinics and emergency rooms. In some areas, they seem to be on almost every corner. In addition to stand-alone buildings, these clinics are popping up in less conventional locations, like retail centers.
Quick-care clinics are increasing for several reasons, both patient and provider driven. Baby Boomers and Millennials both look for convenience and accessibility, though for considerably different reasons. Many Baby Boomers are reaching the point where they don’t want to travel far for healthcare services or rely on others to take them. Millennials are also looking for convenience in that they want healthcare services to be fast and affordable. A primary care physician is not the first visit for a minor illness or injury. Instead, Millennials are more likely than older patients to use urgent care and retail clinics.
These facilities are efficient but lack experience-driven changes that are growing in other sectors of development. Even in existing healthcare facilities, principles of good design and a focus on human experience are coming to the forefront. There’s a new trend of hospitals and healthcare facilities becoming more hotel-like than institutional, with private rooms, natural materials, acoustics that foster a peaceful and calming atmosphere, gardens, and art installations.
Building on the knowledge that reduced stress has been shown to shorten patient stays, the guiding principle is that a pleasant environment can promote healing. The use of natural light satisfies staff and patients alike. Windows that overlook gardens and other natural settings create even more benefits. Some hospitals have positioned windows lower so that bed-ridden patients may look through them. Facilities are increasing in size but containing fewer beds. The new focus is to give patients and their families more space, privacy, and comfort.
While many hospital buildings are undergoing renovations like this, new construction has dropped sharply. Healthcare investment capital has been going toward ambulatory-care facilities, physician hiring, information technology and telehealth.
Another factor in the reduction of bed numbers in hospitals is the increase of outpatient care. With many medical practices moving online, especially more basic practices, bed space is even lower. Hospitals with fewer staffed beds are also looking for new ways to generate revenue from their excess physical space, including signing leases with hospice providers or even hotel operators.
Adjusting the design of a medical building is a large investment, but the payoff is greater employee satisfaction and work ethic. In combination with short stays and faster healing from patients, turnover and success rates rise.
Healthcare is likely to see a lot of updates in the next decade. With an expanding elderly population, demand for healthcare facilities continues to increase. Investment in healthcare real estate will likely spike in order to fulfill the need for specialized assisted living facilities.
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