R.J. Sommerdyke

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Finding strong deals in the healthcare real estate space has gotten harder this year and investment sales reflect that dynamic. Yet the demand for these assets persist, leaving developers in a quandary. To answer demand, many of these companies are getting creative. To find out more about this trend, GlobeSt.com caught up with R.J. Sommerdyke, vice president of acquisitions with Meridian, a developer and owner of medical office real estate with offices in Newport Beach and San Ramon, California, plus Phoenix, Dallas and Seattle.

What creative trends in the healthcare market are you seeing?

Sommerdyke: Over the past several years, there has been a drastic shift in the delivery of healthcare away from the traditional on-campus hospital setting and into outpatient facilities within communities. In fact, 70% of all new medical office construction across the nation this year, has been for off-campus facilities.

The main driver for this is to allow providers an opportunity to better serve their patients in a much more efficient and convenient manner. As a result, most of the demand we're seeing is for infill locations with much more retail-like characteristics than previously sought for medical office buildings.

Given the high price of land and construction costs, coupled with the high parking ratios and large tenant improvements necessary for medical office, new development is oftentimes not a feasible option. In order to be successful today, developers like Meridian are constantly being challenged to think outside of the box in order to find suitable solutions for our clients.