Colorado-Real-Estate-Journal_292652

F ueled largely by the effects of the pandemic, the demand for medical office space has skyrocketed in Denver and several other Western U.S. markets. Pre-pandemic, it was common to see a hospital or large provider group initiate the develop- ment of a medical office building. And it would own the building out- right or lease most of the building. The development would be driven by a specific need, and the building would be designed and constructed accordingly. While this approach still is being practiced, there has been a rise in speculative medical office development with significant- ly less preleasing. n Shifting strate- gies. Increased pressures on health systems and provider groups, growing capital constraints and the uncer- tainty of service needs in the short and long term are changing the approach to MOBs. Recently, Ryan Cos. and Modern Healthcare Custom Media surveyed health care leaders across the coun- try, and remarkably, 70% of survey respondents say they are likely to consider leasing their facilities (versus owning). Additionally, the survey responses showed that one of the top barriers faced by respon- dents for creating and implement- ing their real estate strategy was conflicting capital priorities or lack of available capital (32% of respon- dents). Given capital constraints and lack of clarity for the future, there is a refined focus for health care providers to only take the space that is known to be needed at that time. It is becoming especially important for hospitals and pro- vider groups to find a partner who can help fill the gaps and advise on real estate strategy. Also, there continues to be a strong move- ment of placing more health care services into an outpatient setting and into facilities more accessible to a broader mix of the population. These health care service require- ments often are met with a lack of available quality space, especially if the requirement is greater than 10,000 square feet. The only option is often a new build. n Data-driven decision-making on locations. The enhancement of health care data analytics over the Please see Market Update, Page 16 Jaime Northam Vice president, health care real estate development, Ryan Cos. Speculative medical office space is on the rise INSIDE Insights on the key considerations for life sciences developments and conversions The Fitzsimons campus works to meet the needs of the growing life sciences sector Creating spaces Unique ecosystem PAGE 12 PAGE 14 The top four long-term, pandemic-related impacts the industry will need to address Health care trends PAGE 4 July 2022 There continues to be a strong movement of placing more health care services into an outpatient setting and into facilities more accessible to a broader mix of the population. Pictured here is a waiting room lobby at Surgery Partners Premier Surgery Center in Colorado Springs.

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