MDNews - Central New York

Meeting Medical Office Space Needs in a Time of Transition BY BRIAN M. BALASH, CCIM HE ALTH CARE HA S been the largest job creation sector over the past few years, with most of the jobs added in ambulatory care facilities. It is a trend that has grown year after year. The implementation of the ACA has fundamentally changed the nation's healthcare delivery system. Over time, we've seen the transition of common medical procedures to outpatient clinics accelerate. During the next 12 months, healthcare systems will continue to gear up to handle those patients, and much of that will involve development of non-acute care facilities. In many ways, the ACA has been very positive for healthcare real estate, helping create demand for outpatient facilities. As healthcare providers plan for how to handle all the changes in the ways they do business, they also need to start evaluating how these changes will aect their real estate. SURVIVING Several practices will be crippled by the ACA, so you will need to be creative with how you proceed in meeting your real estate needs. Here are a few ways to think outside the box as you consider what to do about your facilities. + Subleasing — This can help from both aspects: You can gain income on used space within your existing facilities, or you can pay a reduced cost to take advantage of someone else's ine•ciencies. Subleasing also usually oers a shorter, more flexible lease term. + Hoteling — Today's modern o•ce space is a smaller, more e•cient plug-and-play atmosphere, where you can sit down with your computer and work from any empty workstation. This concept is growing within the general o•ce community, and healthcare practices have been testing the waters. As EHR and technology advance, this may become a trend. + Consolidation — As much as you don't want to close an o•ce, it may be a win in the battle for survival. We have seen many small satellite o•ces consolidate to central locations. + Mergers and acquisitions — By joining forces with other groups, practices will be able to compensate for underutilized real estate, as in subleasing. FLOURISHING Just as many practices will struggle with changes brought on by the ACA, many will flourish. A long with that success will come growth, and planning expansion can be di•cult. Here are a few ideas to consider when it comes to a successful growth strategy. + Purchasing — If you own the property where you practice, you are more likely to have the ability to build an addition. + Building — As the medical industry becomes more and more competitive, you will want a way to dierentiate yourself from the competition. A new, state-of-the-art facility can certainly do that. It also allows you to build a larger property than you currently need and lease it out until you can expand into it. If you never need it, you're left with income. + Expansion — If you lease space in a large medica l o•ce building and the neighboring practice isn't as successful as you are, now might be the time to negotiate to take the space or at least the rights to it. As far as additional locations are concerned, there may be an opportunity to serve an untapped market in an area that may be underserviced currently. Regardless of which of the two directions your practice may be headed, your course of action is to strategize. Reach out to a knowledgeable commercial real estate professional early in the process. He or she can provide all the market and industry knowledge you need to make informed decisions. As most real estate practitioners are compensated as a result of a transaction, their advice will come at a cost that is aordable to every practice: free! Brian M. Balash, CCIM, is a licensed sales agent specializing in medical and corporate real estate at Pyramid Brokerage Company, a Cushman & Wakefield Alliance Partner with 10 o•ces across upstate New York. He is a director with Cushman & Wakefield's Healthcare Specialty Practice Group. The Healthcare Practice Group is a national platform of real estate professionals special- izing in various sectors of the healthcare industry, such as leasing, acquisition and disposition, and management of highly integrated, state-of-the-art medical facilities. For more information, contact Balash at 315-445-8506 or bbalash@pyramidbrokerage.com. ■ M D N E W S . C O M /// M D N E W S C EN T R A L N E W YO R K ■ 2 016 M D N E W S . C O M /// M D N E W S C EN T R A L N E W YO R K ■ 2 016 R E A L E S T A T E ❰❰❰❰❰ 1 1

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