Today, the medical office world is undergoing significant transformation driven by evolving patient needs and expectations. Medical office property management presents a unique set of challenges and complexities that go beyond the standard practices of commercial real estate. Unlike traditional office spaces, medical facilities and medical office buildings (MOB) require meticulous attention to regulatory compliance, specialized infrastructure, and patient-centric design. From ensuring adherence to healthcare regulations and maintaining sterile environments to accommodating the specific needs of medical professionals and their equipment, property managers must navigate a multifaceted landscape all while navigating the changes to the patient population demographics.
Understanding these nuances is crucial for optimizing the functionality, safety, and overall success of medical office spaces, supporting both the healthcare providers and their patients in delivering quality care. As the world and the needs of patients shift, so must medical office facilities and the professionals who manage them.
In 2020, when COVID-19 reared its ugly head and the world began to shut down, the rhetorical question was what is going to happen to medical office buildings? Someone rightfully stated that people were still going to get sick from diseases other than COVID-19 and they would still need to go to medical facilities to see their physicians. It is true that the COVID-19 pandemic affected medical office property management, prompting a shift in both operational practices and tenant expectations.
However, the day-to-day experience of patient visits, albeit with masks and sanitizing dispensing equipment around every corner essentially remained constant. Some sectors of the commercial real estate world have suffered because of COVID-19 and the acceptance of work from home as an alternative to five days a week in the office. The effect has been lower occupancy and greater vacancy. Conversely, a reevaluation of space utilization and flexible leasing arrangements has presented. Increased focus on creating adaptable spaces that could easily accommodate future changes in healthcare delivery models, driving innovation and investment in property management standards has been a focus in the medical office management world, post pandemic.
“Practice preferences have continued to change over the past few years, with much of this change spurred by the COVID-19 pandemic. Many practices have shown increased interest in off-campus properties for their ease of access and more convenient locations for many patients, as well as often having free parking. However, there are still many specialties that need, or perceive a need, to be in an on-campus property due to hospital access for surgeries as well as a desire to be near a larger referral base,” said Bob Stuart, Vice President of Healthcare Advisory Services at Transwestern.
“The one thing most practices do have in common is their increased demand for MOB’s to be nicer places for their patients and employees to spend time. The growing trend of ‘hospitality’ inspired design in the traditional office world has certainly bled over to medical office. There are still many groups that prefer smaller buildings with direct access or minimal common area, but if a practice is going to move into a multi-tenant MOB they want nicer common areas with features like comfortable seating, as well as amenities like an on-site café that we traditionally saw more in large office properties. These things make a difference in marketing space as well, giving a ‘wow’ factor on a tour that properties without these features lack,” said Stuart.
So, what does the future look like for the medical office world? When the topic of medical care and subsequent demand for outpatient medical office space arises, the conversation quickly turns to our aging demographics. The incoming tsunami of America’s 70 million baby boomers is expected to drive unprecedented demand for outpatient visits and healthcare research and development. This cohort, now largely in their senior years, is experiencing a range of health issues that require regular, non-emergency care, including chronic disease management and preventive services.
The shift towards outpatient care reflects a preference for less invasive procedures and a desire for more personalized, accessible healthcare solutions. Consequently, medical offices are increasingly adapting to meet the needs of this growing patient population, emphasizing convenience, specialized care, and tailored health management to support the unique requirements of aging boomers. As the population ages, the demands upon the healthcare communities will continue to grow. Additionally, the migration of retirees to Sunbelt states puts an even greater burden on those areas.
The demand for outpatient medical care office buildings has been steadily increasing as patients and healthcare providers alike seek more accessible and efficient care solutions. These facilities, which support a range of services from routine checkups to specialized treatments, cater to the growing preference for outpatient care over traditional hospital settings. With advancements in medical technology enabling complex procedures to be done on an outpatient basis, and the shift towards preventive care outside hospital environments, there is a heightened need for well-designed office buildings. These spaces must accommodate evolving healthcare practices, provide a welcoming environment for patients, and incorporate modern amenities to support a diverse range of medical services.
Another developing area is the growth of Life Science, also known as Research and Development Facilities/Offices. Typically, these are high-end laboratory facilities with extremely sophisticated mechanical systems needed to support the integrity of the experiments being conducted. These Life Science Centers are often built close to major universities, as many of the people leading research projects are professors at the adjacent university. This allows them to fulfill their desire to educate and lead research.
A prime example is the University City Science Center in Philadelphia. It is at once next to Drexel University and the University of Pennsylvania and encompasses well over two million square feet including the recently opened Drexel Medical and Nursing Schools. It was on this campus that a professor from the University of Pennsylvania synthesized the COVID-19 vaccine that was produced by Pfizer. Truly these things don’t happen overnight, and this team had spent decades working on the ability to manipulate the RNA in cells to rapidly deploy vaccines and medicine when needed.
Hospitals and surgery centers are accredited by an institution known as the Joint Commission. The Joint Commission accreditation process is a comprehensive evaluation designed to ensure that healthcare organizations meet exacting standards of quality and safety. It involves rigorous review of an organization’s policies, procedures, and performance by expert surveyors who assess compliance with established standards. The process includes a detailed on-site survey, where surveyors observe operations, interview staff, and review patient care practices. Achieving accreditation signifies that the organization is committed to providing exceptional care and is continually striving to improve its services. Medical office property managers work closely with healthcare staff to ensure that the building supports the delivery of high-quality patient care and adheres to all regulatory requirements, contributing to the facility’s successful accreditation.
In conclusion, the landscape of medical office property management is evolving rapidly in response to a range of contemporary challenges, from the shifting dynamics brought on by the COVID-19 pandemic to the increasing demand for advanced health and safety standards. Today’s medical office property managers are expected to be versed in not only varying property types, but the changing needs of the physician practices, patient population, clinics, ASCs, and research and innovation labs they support. Property managers must navigate these complexities by adapting innovative strategies that balance tenant needs with operational efficiency.
As healthcare delivery continues to transform and the emphasis on flexibility and resilience grows, effective property management will be crucial in ensuring that medical facilities stay adaptable and functional. Creative leasing strategies, increased cleaning protocols, and adherence to safety and health regulations are all areas in which today’s medical office property manager must remain focused. Embracing these challenges with proactive solutions will not only address current concerns but also set a solid foundation for future success in a dynamic industry.
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