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How Should CRE Bring In Healthcare Expertise?

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When The Connell Co. was looking to add new tenants to The Park, the development firm’s 185-acre live-work campus in Berkeley Heights, New Jersey, earlier this year, it felt that the moment demanded more than the usual marketing messages or amenity packages.

To be competitive, commercial real estate needs to offer future tenants assurance that any new space takes employee health and healthcare access seriously. The firm’s solution was to look for a medical partner of sorts to help offer healthcare as an amenity.

Eden Health, a telemedicine startup that focuses on primary care, will soon open an office on-site. For a small membership fee, tenants can become Eden patients, with access to same-day appointments with on-site physicians and therapists via the provider’s mobile app (the fee is “nominal”; representatives wouldn’t get any more specific). The Connell Co. will sponsor these memberships and pay a portion of the fee, viewing this investment as a step toward what it believes will soon be recognized as an essential amenity for all Class-A commercial properties — comprehensive healthcare.

“This is a holistic approach to wellness and lifestyle,” Connell Co. Senior Vice President of Hospitality and Marketing Stephen Kilroy said. “Employees can get access to primary care doctors right in the building, as well as simple things like flu shots.”

Having a medical tenant as a selling point, or even the cornerstone of a mixed-use development, isn’t anything new. Mosaic Development Partners has long made healthcare tenants a focal part of its strategy to finance and build community-focused commercial and residential projects. And the so-called wellness real estate trend has grown into an industry estimated to be worth more than $134B, with developers chasing new building standards such as WELL and integrating all manner of chemical-free fixtures and environmental amenities as selling points.

But Connell’s desire to make the advice and assistance of healthcare professionals part of its offering to clients is different. It speaks to the ways CRE is looking at how to make health access and awareness a best practice and amenity. Other companies have embraced different means of providing such expertise, often by hiring outside consultants: expensive HVAC upgrades focused on UV light and bipolar ionization, focusing on new cleaning routines, putting faith in new technology to encourage social distancing and even having medical professionals on staff.

Crocker Partners, a Boca Raton, Florida-based CRE firm with properties across the Southeast, made news earlier this year when it hired Dr. Walter Okoroanyanwu to be its director of environmental health. Earlier this summer, Okoroanyanwu, an epidemiologist with a CRE background, said that while many companies had talked about implementing health initiatives, Crocker sought to implement real changes, charging him with developing strategies and procedures to improve safety and wellness amid the company’s 11M SF portfolio. His main goal was figuring out how to stop the spread of COVID-19.

“Above all, we want to create a safe and healthy workplace,” Okoroanyanwu said in July. “Every day, COVID virus information is fluid, it’s ever-changing. You need somebody with my background who’s able to follow new information and research and convey it to the employees.”

While news of new vaccines provided a needed boost of optimism to real estate interests fearful of extended lockdowns and work-from-home directives, it is clear that reopening will be an extended process, vaccine rollouts may take months and months to filter through the population, and even on the other side of the crisis, there has been a fundamental shift in the way tenants think about health and infections risks. CRE firms are and will continue to adjust to this new reality. It raises the question of how firms acquire talent in these fields, and perhaps how they approach marketing that talent, or healthcare amenities, to customers.

“Connell Co.’s approach is a good fit for the current moment,” said Kilroy. “Hiring a specialist to be in your office is an interesting approach, but the real differentiator as workers slowly return to the office will be offering healthcare as an amenity.”

The idea is already being adapted quicker for residential settings. In Denver, a high-end wellness-focused residential project, Lakehouse, will feature a “wellness concierge” for residents, and in Miami developer CC Homes is partnering with Baptist Health’s Care to provide on-demand virtual healthcare services to a pair of new developments.

“Having a real professional at your properties is a great investment, and a cool shared asset,” Kilroy said. “In addition, it’s nice to be at arm’s length when it comes to liability.”

Connell Company has worked with Eden Health to develop reopening plans that the startup has signed off on. But Kilroy sees the idea of outsourcing and amenitizing health access to be much more palatable.

Earlier this year, a McKinsey analysis of the CRE world’s response to COVID suggested that the pandemic would create long-term behavioral changes, especially around health and wellness and perceptions around safety and work. Investments in sanitizer stations, HVAC and ventilation, and outdoor spaces will be commonplace.

“The Park hopes to make that a key selling point, installing jogging trails, outdoor workspace, playing fields and outdoor gyms as part of a push to portray their new development as a wellness campus,” Kilroy said. “The potential new clients considering space at the Park are very interested in this option.”

 

Source: Bisnow

How Medical Offices Fuse With Mixed-Use Projects

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With the need for medical services on the upswing and an increased overall preoccupation for wellness, communities across the nation have been looking for solutions to bring health-care services more within their reach.

For a growing number of mixed-use developments, medical offices are becoming the ultimate amenity, making convenient care available in settings that feature modern technology and are minimizing the unpleasant clinical experience.

HSA PrimeCare Executive Vice President Robert Titzer points out that while the era of academic medical centers is not over, demand for smaller medical offices located in sites with good visibility and ample parking is expected to rise. What’s more, given that medical offices are considered safer investments in times of economic slowdown than retail and hospitality assets, adding a health-care component to a larger development ensures its stability on the long run.

Commercial Property Executive: What type of mixed-use developments is incorporating medical office spaces and do you think luxury projects are benefiting more from this addition?

Robert Titzer: Medical offices can be incorporated into a wide variety of mixed-use developments. Everyone needs health-care services, at all income levels, and essentially wherever people live and work. So, whether the project is deemed a luxury product or otherwise, there is often a health-care application that can make sense in the overall development.

Commercial Property Executive: What criteria does your company apply when choosing a location for a new MOB project that will be part of a mixed-use?

Robert Titzer: Our company’s decision-making closely follows that of the designated health-care provider. That is, we attempt to align the provider’s ambulatory care strategy with location and site selection on the macro level. On the micro level, we look for sites that have good visibility, intuitive wayfinding, ample parking and/or transit access.

Commercial Property Executive: Accessibility is a great advantage of health-care projects. Are there any disadvantages that mixed-use property managers could address better?

Robert Titzer: The challenge that many owners find is dealing with the mix and volume of patient and customer flow in and out of mixed-use sites. Medical facilities operate best when their patients do not have to compete for parking or access with other component users of the development, because oftentimes the patient population is not as physically mobile as a shopper, for instance. They need drop-off areas and protected parking close to their destinations.

Commercial Property Executive: Tell us about how you succeeded in attracting Froedtert & the Medical College of Wisconsin to Drexel Town Square and how do health-care providers usually see the concept of a MOB as part of a mixed-use development.

Drexel Town Square. (IMAGE CREDIT: HSA Commercial Real Estate)

Robert Titzer: Drexel Town Square is an exciting new “front door” for Oak Creek, Wis., and having a health-care component dovetailed perfectly with the development’s mix of community, retail and residential uses. Its location made perfect sense for Froedtert & the Medical College of Wisconsin. As part of a larger 85-acre mixed-use project that includes a new city hall, public library, shopping, restaurants, service-oriented businesses, hotel and apartments, a MOB fits into this modern, master-planned development. HSA PrimeCare worked hard to ensure the development addressed the access issues mentioned above. We also programmed flexibility into the design by approaching it as a mini-campus that could adapt and grow with the health-care system’s needs over time.

Commercial Property Executive: What are your expectations from the medical office sector going forward?

Robert Titzer: We see continued strong demand for ambulatory care facilities in a wide variety of locations, as health-care providers strive to reach their patients more effectively by providing easier access, and to serve their patients more economically in ambulatory care settings versus in-hospital care. Consolidation of sites of care is also a driver in the establishment of newer, more modern and efficient buildings that can drive operating efficiencies for health-care systems.

Commercial Property Executive: What should health-care property managers focus on more at this late point in the economic cycle?

Robert Titzer: At HSA PrimeCare, we always strive to stay ahead of the game. That means being prepared for what your building needs to be five years from now, not simply what it is today. That also means keeping the property in A-plus condition and anticipating tenant needs as uses evolve with the change in health-care delivery. This could encompass improvements such as common-area renovations, or services and amenities like enhanced on-site dining and snack options.

Commercial Property Executive: Today, we’re seeing a lot of focus on wellness rather than just getting treatment. Is the era of mega hospitals and medical campuses coming to an end?

Robert Titzer: We see the large academic medical centers taking on increased importance in our society as places where groundbreaking research takes place and extremely complicated care is delivered to the most challenged patients. These centers will continue to grow in importance as it is an exciting time for medicine. Medical professionals now have vast troves of medical data at their disposal that can be used to tackle these mega-challenges. Academic medical centers are uniquely positioned to take on this task, which makes their existence all the more important in today’s world.

 

Source: Commercial Property Executive