IRVINE, CA—Despite the move toward the community and away from hospital-based healthcare, assets that are close to hospital campuses still matter considerably for health systems, NAI Capital's SVP and director of healthcare services Sonya Dopp-Grech tells GlobeSt.com. As we recently reported, Dopp-Grech represented CRC Real Estate Corp., an affiliate of CHOC Children's, in the purchase of the Centrum North Building at 1120 W. La Veta Ave. in Orange, CA for $43.4 million or approximately $245 per square foot. We spoke exclusively with Dopp-Grech about on- or near-campus healthcare properties and how they are being viewed and managed by health systems.
GlobeSt.com: As healthcare moves away from hospitals and closer to consumers, how are hospitals managing their on- or close-to-campus assets?
Dopp-Grech: Although one of the trends in healthcare is to move closer to consumers, centralized core campus facilities remain a key component to the delivery of healthcare. Each hospital has a different format, but overall, in the pig picture, hospitals try to keep control of as many assets as they can. In the case of CHOC, they own the CHOC tower and property across the street and can pull admin uses out of the hospital; they have control of the campus to do that. In some cases, they are using this space as back-office space. Opening clinics in the community is the trend, but it's a convenience and value for the patient base.
GlobeSt.com: Will most of these assets remain hospital property or be sold?
Dopp-Grech: Each hospital and medical group is different; however, the general trend that we are seeing in Orange County is for hospitals to retain their existing real estate assets and, in some cases, acquire additional properties in strategic locations. It's definitely a benefit for any hospital to hold onto this property because it allows them to control who comes into the campus setting.
GlobeSt.com: If the close-to-campus assets will remain hospital property, how will they be used? If they are sold, what is the most common use by the new owners?
Dopp-Grech:Close-to-campus real estate is frequently used for specialty medical uses, especially for services and procedures that can often be provided at a lower cost than on a hospital campus. Additionally, administrative offices can often be more cost effective when placed outside of the physical hospital campus while still remaining in close proximity.
GlobeSt.com: What else should our readers know about on- or close-to-campus healthcare assets?
Dopp-Grech: Quality on-campus or close-to-campus healthcare assets are likely to remain strong institutional quality assets for long-term hold. Health systems can lease them to other entities or use them for themselves, but this way it is in their control and it's a lot more convenient for them to manage it.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
