Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
Conventional wisdom tells us that spending less money is the most effective approach to saving money. After all, a penny saved is a penny earned and the more you save, the more you have left over. That logic is hard to argue with, but it is not always fool proof. Saving money for your practice the wrong way can lead to diminished patient care, outdated equipment, the wrong location for your practice and additional negative results.
There are several critical factors often overlooked when a healthcare practice’s primary focus is paying the lowest rent vs. achieving the best combination of overall terms. Let’s look at three factors where paying higher rent could actually increase your profitability.
#1: The Cost to Build
Healthcare buildouts often cost two-to-three times more than a typical commercial real estate space. This is attributed to many factors that are unique to healthcare, including:
More durable finishes
Millwork and cabinetry
Plumbing and sinks in exam rooms, sterilization centers and laboratories
Increased electrical and HVAC requirements (heating, ventilation and air conditioning)
How do you handle a real estate negotiation if your landlord is also your patient?
Many healthcare tenants find themselves in this situation when approaching a lease renewal or relocation. Compounding the situation, is that most healthcare professionals are not prone to conflict or confrontation and would prefer to avoid them. This creates a scenario where tenants want to obtain the best terms possible for their practice without upsetting their landlord and losing them as a patient.
In an ideal world, you could tell people exactly what you hope to achieve and then expect to receive a fair response. Unfortunately, commercial real estate is not one of those worlds! The difference between a properly or poorly negotiated lease or purchase contract can benefit or cost you tens to hundreds of thousands of dollars over a ten-year period. Understanding how much is really at stake during a commercial real estate negotiation changes how you should approach every transaction.
To help your perspective, look at these foundational questions: read more
As Commercial Real Estate continues to grow, the medical office space is evolving to cater to new trends which affect the practice of medicine as well as the real estate industry as a whole. The healthcare sector is beginning to lean toward efficient spaces, and creating greater availability in spaces.
With equipment, staff and use of extremely sophisticated technology, medical buildings utilize huge amounts of energy. With the expansiveness of the size of most properties, intense lighting needs, air and temperature control, and high-powered machinery it has been difficult to operate in a low efficiency environment. read more
There has been much talk about the future of health care real estate investment trusts (REIT) and the evolution of the real estate market, as well as the way patient care is being provided in today’s world. With greater demand for outpatient and ambulatory surgical centers, the healthcare REIT market is forecasted to be a bullish market. Additional reasons for positive forecasts include an aging population with greater demand, a track record of high performance, and cost of equity capital. Investing in income-generating real estate can be a great way to increase net worth. For many, investing in real estate, particularly commercial real estate, seems to be out of reach financially. However, with the right partnerships and guidance, it is possible. REITs (pronounced “reets”) allow mall investors today to pool their resources with other small investors in order to invest in large-scale commercial real estate as a group.
In 2018, theGlobal Wellness Institute (GWI) released its report “Build Well to Live Well” on the global and regional wellness lifestyle real estate and communities market. The report highlighted various emerging real estate wellness living concepts that will drive future development, and create a surge in the $134 Billion dollar industry, expected through 2022, to reach $180 billion.
The lines between home, work and leisure are less defined. Your neighbor can be your patient, your coach or your nutritionist. The millennial generation and others are focused on living where their needs for healthy and long life are considered. Many people are willing to pay out of pocket for services that contribute to their health and wellness. Medical industry groups and health services will have to catalyze in order to build these wellness communities. These communities will be created by combining medical industry companies and research organizations, high quality hospitals and health services for consumers, and holistically designed wellness focused homes and neighborhoods. read more
Florida has experienced a huge influx of new residents in the past few years. Throughout the state you’ll find snowbirds moving for a better climate, professionals moving for new opportunities, lifestyle change and better tax incentives as the market grows, and families leaving big city life to establish roots in more suburban areas in Florida. In addition, in areas like Central Florida, big investors have established offices and purchased high dollar medical real property due to strong demographics, readily available open space, and the continued appeal of healthcare professionals looking to grow and open new offices. On a national scale, according to data released by Revista and Healthcare Real Estate Insights (HREI), outpatient medical real estate development projects totaling nearly $7.7 billion in construction value and 19.4 million square feet were completed in 2016. read more