Our Health Care Real Estate Briefing is your comprehensive summary of weekly health care real estate highlights happening across the nation.
Over the last few weeks, the Biden Administration and CMS have released ownership data for skilled nursing facilities (“SNFs”). The goal, according to the Administration, is to add transparency to SNF ownership and to encourage competition. Trade organizations are pushing back claiming the Administration is focusing on the wrong issues. One SNF trade association, AHCA/NCAL, published a new report describing the number of SNFs that have closed over the past few years, along with a prediction of the number of SNFs that may close this year. SNF trade associations are pushing for higher reimbursement and staffing relief. According to one source, the average daily Medicaid rate for SNF care is around $265 and staffing costs are sometimes as much as $70 per hour. The numbers don’t work. In other news, health care M&A data was released for 2021. The amount of private equity investments in health care continues to grow at a rapid pace. Finally, BOMA will host its Medical Office Building conference this week in Nashville, Tennessee.
- CMS released data on mergers, acquisitions and changes of ownership involving hospitals and SNFs enrolled in Medicare. This is part of the Biden administration’s effort to increase competition and transparency around hospital and nursing home ownership.
- AHCA/NCAL published a report on SNF closure data stating that more than 1,000 SNFs have closed since 2015. Of those closures, 776 occurred before the pandemic and 327 occurred during the pandemic. Additionally, nearly 45,000 SNF residents have been displaced due to closures and more than 400 SNFs are projected to close in 2022.
- Bain & Company released its 2022 Health Care Private Equity and M&A Report. In 2021, $151B of PE capital was invested into health care transactions, more than 2x the amount invested in 2020. Biopharma, medical technology and provider transactions made up the bulk of the transactions.
- Revista MED published MOB cap rate data. In Q1, cap rates ranged from 3.4% to 6.3% with a median cap rate of 5.8%. A majority of investors believe cap rates will remain at or near current levels throughout 2022.
- The National Academy of Medicine’s report on Healthy Outcomes has become the benchmark for understanding Social Determinants of Health. According to the report, the factors that impact the length and quality of one’s life are (a) physical environment (10%), (b) social and economic factors (40%), (c) clinical care (20%), and (d) health behaviors (30%).
- Building Owners and Managers Association (BOMA) International‘s Medical Office Building Conference is this week in Nashville, TN.
- Enclosed shopping malls are being repurposed by health care providers. 32 malls have significant health care tenants and 1/3 of those malls have been transformed since the pandemic started per HealthLeaders.
- Houston Methodist started site work on its $1.4B, 26-story Centennial Tower within the Texas Medical Center. The project will include 400 patient beds and will take around 5 years to build per the Houston Business Journal.
- PMB and The Springs Living, LLC broke ground on a 360K SF, 12-story, 250-unit senior housing project in Vancouver, WA. The developers plan to seek LEED and Fitwel Certification for the project per PR Newswire.
- Steward Health Care acquired the vacant Miami Medical Center Campus from Nicklaus Children’s Health System. Steward plans to reopen the hospital per the South Florida Business Journal.
- HCA Healthcare purchased 26 acres of land in Mt. Juliet, TN (near Nashville) per the Tennessean. Plans have not been announced for the land.
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Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
