Last week, a number of M&A headlines made the news. SSM Health closed a large physician practice acquisition. Healthcare Realty also announced that it will joint venture (“JV”) 27 properties as part of its merger plan with HTA. Kaufman Hall noted that M&A activity is up in the health care sector. A number of other health care real estate reports were released about health system strategy, fit out costs and permit timing. Finally, a large outpatient project was announced in New York.
- SSM Health completed its acquisition of SLUCare Physician Group from St. Louis University. The transaction adds 1,200 clinical providers to SSM’s health system per St. Louis Business Journal.
- As part of its pending merger with Healthcare Trust of America Inc., Healthcare Realty Trust Inc. is currently under contract with five counterparties to sell or JV 27 properties totaling $807M per Commercialsearch.com.
- Healthcare M&A revenue hit a record high in 2Q of 2022 with 13 transactions generating $19.2B, per Kaufman Hall’s M&A Quarterly Activity Report.
- Ryan Companies conducted a survey of health care leaders about their current real state strategy. 70% of respondents are considering leasing versus owning their next facility, 28% are considering off-campus storage space to store supplies to avoid future supply chain delays and 35% are shrinking their real estate footprint to control costs.
- Micro-hospital strategies continue to vary among health systems. Ascension in Indianapolis is scaling back its portfolio per IBJ, while other providers like Nutex Health are doubling down on the strategy. Nutex plans to open a total of 5 new micro-hospitals in several states, adding to its current portfolio of 21 micro-hospitals in 8 states per Cision PR Newswire.
- JLL released its Fit Out Guide for Outpatient Healthcare Facilities, finding 1) The average cost of renovating an outpatient facility is $355/sf (this includes hard/soft costs and FF&E); 2) If specialty imaging equipment is needed, the cost will increase from $100 to $300/sf; 3) Outpatient services are growing nationally and they are expected to increase in Austin by 28%, Phoenix by 21% and Raleigh by 20%.
- Cushman & Wakefield released its permit timing guide for new projects in Texas. The turnaround times per city are as follows: Austin – 10 to 14 weeks, Dallas – 12 to 16 weeks, Ft. Worth – 7 weeks and Houston – 10 to 12 weeks.
- The CRE job market has been hot throughout the pandemic but is showing signs of a cooldown. “It’s like when the music goes off at 2 a.m. in a club,” according to Allison Weiss, a recruiter quoted in Bisnow.
- Rochester, N.Y.- based UR Medicine plans to open a surgery center at a 300K sf outpatient orthopedic campus by the end of the year. The facility will cost more than $200M to develop and will employ almost 700 staff per Becker’s.
- Please reach out to Andrew Dick at adick@wp.hallrender.com if you are aware of any real estate positions within hospitals or health care systems.
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.
