Smith: Hoag Health Center Irvine at Sand Canyon is unique due to its proximity to Hoag Hospital Irvine and the innovative deal structure with Pacific Medical Buildings. This allowed us to participate in the underlying real estate deal while relying on their expertise to manage the development process so that Hoag's resources could focus on community alignment and specialized service strategies. We were therefore able to deliver the project very rapidly and hit the ground running with our programs.

Based on our first year's performance, we are exceeding our operational targets on almost all dimensions.

GlobeSt.com: How great is the need for specialized medical buildings in Orange County?

Smith: There is a significant shortage in the right type of medical buildings in the county. In many communities, healthcare has typically evolved around their local hospital in a highly fragmented manner, which creates confusion and anxiety for the patients who are forced to navigate the complexities of the healthcare system. What we have seen at Hoag is that our patients like the experience of a “one-stop shop” where all of their needs can be met in a single visit. This requires the aggregation of both diagnostic services with primary care and specialists creating an experience that is patient centric and integrated. At this time, there are very few of these types of facilities or campuses in the county.

GlobeSt.com: In which areas of the market would such buildings fare best?

Smith: Specialized medical buildings can be scaled to serve most urban and suburban markets. The challenge is to take a long enough view of the market and use the real estate asset as part of the care optimization and brand strategy to make the investment. This takes patience since existing lease commitments may encumber many of the physicians and providers.

GlobeSt.com: What else should our readers know about this project?

Smith: As originally conceived, Hoag Health Center Irvine was going to be just another medical-office building in the market. What we have done, with our partner Pacific Medical Buildings, is create a health care village that meets and anticipates the community's needs. It is here for residents if they should become sick, but more importantly it's to keep them healthy. This approach gives us the flexibility to evolve as the needs change.