Facility Maintenance

Healthcare Real Estate Trends to Watch

Healthcare and Medical Center Real Estate

Duke Realty owns and operates approximately 142 million rentable square feet of industrial and office assets, including medical office, in 18 major U.S. cities and their healthcare team offers planning, development, ownership and facility management services to hospitals and physician groups.  They recently posted an article listing their six healthcare real estate trends to watch in 2013 and they believe the “the healthcare industry and healthcare real estate have changed dramatically in the past several years.  Healthcare reform, the recession, lower reimbursements and other issues should continue to drive changes, including new uses of medical office space; creative, new partnerships; and an increase in monetization of outpatient facilities”.  The following trends are what Duke Realty expects hospitals and health systems should see in the coming years:

  • Higher-acuity care will increasingly move to medical office buildings (MOBS).
    • MOBs cost less to build, operate and maintain than hospitals.
    • These could improve consumer’s access to healthcare since they will be in suburban areas.
    • “Real estate implications:  These outpatient facilities will need to be designed to a higher, more sophisticated standard than typical MOBs”.
  • Freestanding emergency departments (FEDs) will be used in new ways.
    • According to Don Dunbar, Executive Vice President of Duke Realty, “More and more, we’re seeing for-profit ED companies competing for the 7/11, Walgreen’s and McDonald’s sites”.  Basically for-profit companies are targeting high-traffic, retail-orientated sites.
    • FEDs are not necessarily being created as the first step toward a future hospital campus.
  • Partnering will increase.
    • Partnering will increase so hospitals can broaden their range of services and improve quality of care.
    • Brand-companies will benefit by extending their brands into new markets.
    • “Real estate implications:  New, expanded or renovated “branded” facilities might need to accommodate these partnerships”.
  • The case for hospital-driven monetization will keep getting stronger.
    • Duke Realty says “there continues to be tremendous investor demand for MOBs and plenty of capital is available,[so] this could be the year…[for] an increase in hospital-driven monetization of MOBs”.
    • Money generated from monetization could help fund hospital mergers and acquisitions.
    • “Real estate implications:  More MOBS might be coming on the market”.
  • Repurposing will expand.
    • Offices, retail, industrial space and even grocery stores will be repurposed for medical use and become a prevalent healthcare strategy.
    • “Real estate implications:  There’s still plenty of potential new life for former retail and office buildings”.
  • Compliance will become even more vital.
    • Due to the healthcare reform that passed in 2010, “healthcare providers are now required to self-report to the Centers for Medicare & Medicaid Services (CMS) any violations” of the new legislative laws.  If providers don’t self-report, they could be fined, face prison or be forced to repay disqualified claims.
    • “Real estate implications:  More and more healthcare providers may decide to minimize their compliance risk by monetizing their MOBs”.

Good News for the Charlotte Construction Industry

Charlotte Jobs Market

According to the AGC, “the Charlotte metropolitan area gained roughly 2,200 construction jobs last year, while North Carolina lost nearly 4,000 during 2012, according to non-seasonally adjusted figures”. This was due to private sector demand for energy, health care, higher education and residential construction. While the overall construction employment in many metro areas is suffering from declining demand in the public sector and a lagging private sector market, the Charlotte area’s jobs grew by 6 percent, “ranking the city 43rd out 337 in terms of growth”.

In South Carolina, however, the outlook for new construction jobs is dim, with 100 percent of companies saying they plan to add 5 or few employees in 2013. The majority also has low expectations of construction market growth in 2013, with 91 percent believing it will not grow until 2014 or later.

So, it appears that Charlotte’s construction industry is the strongest in the Carolinas right now, and with North Carolina’s expectations higher for 2013, it is probable that the construction industry in Charlotte will only continue to grow.

Green Building Top 10 Megatrends for 2013

A&K Painting is the North Carolina Leader in Green Expertise.

In a recent press release, Jerry Yudelson revealed his “annual list of Top 10 Megatrends for the green building industry”.  Jerry is known as one of the nation’s leading green building consultants and sustainability experts. He is the founder of Yudelson Associates and has written 13 books on building green.  He believes that despite the global economic slowdown, green building will continue to expand globally in 2013.  According to Jerry, “more people are building green each year, with 50,000 LEED projects underway by the latest counts”.  Jerry lists ten megatrends, but his second prediction stands out specifically, because it affects so many sectors of the building industry, including commercial real estate professionals, facility managers, general contractors, BOMA, education authorities, and more.

In his second prediction, Jerry explains, “The focus of the green building industry will continue its switch from new building design and construction to green existing buildings.  The fastest growing LEED rating system the past three years has been LEED for Existing Buildings Operations and Maintenance (LEED O+M), with cumulative floor area in these certified projects now greater than in new construction”.  The LEED for Existing Buildings O&M Rating System, according to the U.S. Green Building Council, is a “set of voluntary performance standards for the sustainable ongoing operations of buildings not undergoing major renovations”.

For the professionals mentioned above to stay competitive and profitable all new projects will need to be LEED certified, whether Jerry’s prediction is correct or not.  Perhaps more importantly, existing operations will need to follow the LEED for Existing Buildings O&M Rating System; otherwise they will get left behind in this progressive, environmental friendly market.  These professionals need to take into consideration that although transforming an existing building into a green building cost a substantial amount of money initially, in the long run, LEED certified buildings lower operating costs, increase asset value, reduce waste, conserve energy and are safer for occupants.

Bring our ‘Green’ expertise to your project. A&K Painting is the leader in the “Green Painting” world.

EPA Opens Comment Period On Commercial RRP

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For all those involved in Commercial Real Estate, Facility Maintenance and Commercial Construction, the long awaited ‘other shoe’ has dropped.  The EPA’s intent to add private and public commercial buildings to the renovation, repair and painting program took another step forward last week.  See the EPA’s Proposed Rule Information.

Renovations of homes and child-occupied facilities built prior to 1978 must be performed by certified contractors using lead-safe work practices. EPA is currently in the process of determining whether renovation, repair, and painting activities on public and commercial buildings might also create lead-based paint hazards. For those activities that do create lead-based paint hazards, EPA intends to develop certification, training, and work practice requirements as directed by the Toxic Substances Control Act (TSCA).

EPA has opened a comment period to allow for additional data and other information to be submitted by the public and interested stakeholders. This comment period runs through April 1, 2013. More information on this request for public comment, including instructions for providing your comments, can be found in the Federal Register notice.

In addition, EPA plans to hold a public meeting on renovations in and on public and commercial buildings on June 26, 2013. EPA will publish more details on this public meeting in the Federal Register in the spring of 2013.

A&K Painting Company will continue to monitor and report on the EPA’s actions for Commercial RRP.