JLL Healthcare Report: The race is on to meet patients where they are
PHOENIX, ARIZ. – Rising patient numbers and real estate spending point to long-term resilience for healthcare-related buildings – and Phoenix is no exception, according to JLL’s latest U.S. Healthcare Real Estate Outlook report and healthcare experts within the Phoenix office of JLL.
According to JLL, the key trends driving U.S. healthcare real estate that apply equally in Phoenix are:
• Using new types of real estate in new and more locations to continue to capture growing patient demand. More diverse facilities improve the patient experience and win brand loyalty. Innovative settings such as 24-hour emergency care centers, urgent care, wellness and micro-hospitals are popping up in valuable retail locations.
“In Phoenix, well-known names in Phoenix like Banner, Dignity and Honor Health want to be where the population is, making areas like Gilbert, Goodyear and even emerging communities like Laveen very popular for off-campus medical office locations,” said JLL Senior Associate Mari Lederman.
• Offering the right location with the right care – no more, no less – to mitigate decreasing reimbursements and operating income pressures.Outpatient centers often are less expensive to construct and operate than traditional hospitals.
“One of our clients, Cancer Treatment Centers of America, recently opened two off-campus clinics – one on North Phoenix and one in Scottsdale – designed specifically to offer chemotherapy treatments,” said JLL Senior Associate Katie McIntyre. “They are actively pursuing more outpatient care centers now, the first of which will open in the Valley next April.”
According to JLL, on-campus medical office building vacancies sit at 17.6 percent while off-campus vacancy rates have decreased to 14 percent. Through this migration, many users are looking for second-generation space to mitigate rising rents and construction costs, and offer a way to create space that works with their particular use.
• Expanding and renovating inpatient settings to accommodate longer stays.With 10,000 Americans turning 65 every day for the next 20 years, there is an increased need for more effective space in more locations to serve older adults. Also, inpatient facilities will increasingly be focused on the sickest and most acute care needs, keeping hospitals a crucial piece of the healthcare delivery puzzle.
“Our large retirement population makes this extremely important in Arizona,” said McIntyre. “As the aging patient population increases, the demand for more medical office buildings will also increase.”
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.
In Phoenix, JLL is a market leader employing more than 580 of the region’s most recognized industry experts offering office, industrial, retail, healthcare and data center brokerage, tenant representation, facility and investment management, capital markets, multifamily investments and development services, and related services within the real estate leasing, investment and management process.