PLAINSBORO, NJ-While the Obama administration's one-year delay of a key provision of the Affordable Care Act is causing a tizzy of confusion for some large employers, commercial real estate experts say they don't think it will disrupt the trend of rising demand for medical office buildings.
“Delay is not denial,” says Jeffrey Prezant of Cushman & Wakefield. “If it's not today, it'll be tomorrow. If it's not Obamacare, it will be another form of Obamacare.”
The Affordable Care Act will add 40 million people to the healthcare system by 2020,
Prezant noted that the emphasis has already shifted to alternatives for treating the uninsured in emergency rooms. Urgent care centers, specialty centers and other medical official buildings are being developed around the state, most notably along the Route 1 corridor and Princeton Hospital.
One example: A 40,000-square-foot medical office building is under construction in Plainsboro close to the University Medical Center at Princeton
River Drive Construction, which is managing that project and did several others recently, tells GlobeSt.com the commonly accepted industry formula calls for 1.9 square feet of medical space for each patient. With the addition of the estimated 40 million patients nationally to the healthcare system, that means an additional 76 million square feet of medical office space would be required.
“As one the most densely populated state, New Jersey undoubtedly represents a fair share of that” new space required, says Joseph Langan, River Drive's president.
Prezant says he sees construction of MOBs continuing apace this year, if only because the need to take pressure off hospital emergency rooms is not going to go away. "This does not hurt the market really at all, in my view," he says.
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