DALLAS-Although there’s a perception that physicians are rolling in dough and have no trouble paying hefty rents for luxurious medical office space, that’s not the reality today. In fact, most physicians are dealing with declining reimbursements from both Medicare and Medicaid, which makes cost containment a priority for both the healthcare community and the developers who serve it.
“We’re seeing more modular development because it’s easy and fast,” said Todd Lillibridge, executive vice president of medical office properties for Ventas Inc. and CEO of Lillibridge Healthcare Services. “Modular design is efficient and cost effective.”
Lillibridge participated in a panel discussion titled “Signs of Vitality: Assessing Development” during the 2011 Medical Office Buildings & Healthcare Facilities Conference. Nearly 700 healthcare real estate executives attended the conference sponsored by the Building Owners & Managers Association and held at Hyatt Regency Downtown.
Along with Lillibridge, the panel included: Malcolm Sina, president and managing director of Lend Lease DASCO LLC; Greg Venn, president & CEO of NexCore Group LP; Laca Wong-Hammond, first vice president of Morgan Keegan; and James Ronan, senior vice president of development for Pacific Medical Buildings. The panel was moderated by PJ Camp, managing director of Morgan Keegan.
Lillibridge said medical office developers need to think about constructing new properties at different price points, especially out-patient facilities. “We’re focused on size, speed and spend – the three S’s,” he explained.
Sina agreed and noted that Lend Lease DASCO has recently completed MOBs with tilt-up construction to be more sensitive to the reimbursements that physicians are dealing with today. “Cost containment is increasingly important,” he explained.
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