Our Health Care Real Estate Briefing is your comprehensive summary of weekly health care real estate highlights happening across the nation.
Last week, North Carolina legislators proposed a bill that would alter the state’s Certificate of Need (“CON”) program. If passed, the bill would make it easier for certain providers to open new health care facilities. This legislative effort comes on the heels of South Carolina making a big push to change its CON program. South Carolina legislators didn’t get the support that was needed to make any changes. It will be interesting to see if North Carolina legislators are able to make any progress on their initiative. Speaking of CON laws, Ankura published an article that looks at CON programs across the U.S. The article points out that CON laws haven’t kept up with changes in technology and health care delivery systems. It also outlines strategies for health care providers to consider in order to gain market share. Finally, more news on the skilled nursing facility (“SNF”) industry. A number of experts believe the SNF industry will continue to face headwinds in the near term. Finally, affordable senior housing is a real problem in the U.S. One city has hired a senior housing expert to help address the problem.
1. North Carolina legislators published a bill that would change its CON law. The bill, if passed, would eliminate the CON process for ASCs, drug treatment centers, MRI equipment and for converting hospital beds to psych beds. The CON process would remain in place for ERs, adult care homes, SNFs and air ambulances per Spectrum News.
2. Ankura published an article on strategies for health care providers to gain market share in competitive markets. Providers should use market data to justify future needs, reduce costs by understanding the cost per patient day, balance mission-based services with profitable service lines, identify additional sources of revenue and find ways to partner with non-traditional providers.
3. According to 10 economists, the following property types will thrive over the next 12 months: medical office, senior housing, industrial, multi-family and self-storage per Wealth Management Real Estate.
4. CliftonLarsonAllen published a new report on the state of the SNF industry. The report found: 1) 47% of SNFs are at financial risk (up from 40% two months ago); 2) The closure of these facilities would impact 417,000 residents; 3) Pre-pandemic, only 16% of SNFs were at risk; and 4) The cost of CNA, LPN and RN labor is up 28% to 33%.
5. According to 10 SNF experts, up to 10% of SNFs will change ownership or close in the next 12 months, bed prices will remain flat, REITs will continue to pare back the number of SNFs in their portfolios and SNFs will focus on creative ways to solve staffing challenges per Skilled Nursing News.
6. Gensler published a list of senior living design trends in its 2022 design forecast, finding that: 1) Gerontechnology will extend aging in place; 2) Mixed-use, mixed-income and multigenerational lifestyle developments are emerging models; and 3) Designing experiences for caregivers is a big opportunity for operators per The McMorrow Reports/FMLink.
7. The City of Gainesville, Florida hired a Senior Housing Strategist, the first of its kind for a local government entity. The city is experiencing a serious shortage of affordable senior housing per WUFT News.
8. Revista MED published its Q2 hospital construction report. 163 new hospital projects are underway and 30 are micro-hospitals. Additionally, a total of 45M sf of new hospital construction is in progress, the largest number of projects since Revista began tracking this data in 2015 and a 57% increase from Q2 2020.
9. Revista MED published MOB transaction volume for Q1. Transaction volume hit $4.3B, which set a record for 1st quarter transaction volume.
10. An article by AZ Big Media outlines the tremendous growth in the West Valley (Phoenix), one of the fastest-growing areas in the U.S. The article details how numerous health care providers have opened or have announced plans to open new facilities in the area.
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 an individual’s questions that may constitute legal advice.
