The following is a thought leadership post from Dan Spiegel, SVP & Managing Director — Coldwell Banker Commercial
The healthcare industry quickly adapted to virtual care delivery during the pandemic, and for both caregivers and patients, the rapid transition from in-office to on-screen visits left much to be desired.
So what will healthcare look like moving forward? Integrated, and at a pace never imagined before 2020. The demand for in-person primary care and health services hasn’t diminished, and neither has the real estate market supporting that demand.
What is a Hybrid Healthcare Model?
To create the best experience for in-person visitors, hybrid models typically offer patient-focused technology like remote monitoring, care navigation and visit options for physical and online appointments. While virtual visits are flexible, convenient, and great for quick catch-ups, “standalone virtual solutions” often don’t meet people’s full spectrum of needs.
Mayo Clinic’s survey results, published in the Annals of Medicine and Surgery, revealed that hybrid healthcare models are popular among patients. Based on issues stemming from Covid-19, the Mayo Clinic in Florida adopted a hybrid model. Its goal has been to“communicate as efficiently as possible with patients while reducing costs, travel time, and space taken up in hospital beds.”
How Will Hybrid Care Impact Medical Retail?
People will continue to seek in-person services and shop locally for “must-have” health products.
Physical healthcare retail is continuing to expand with major players like Amazon, Walmart, and CVS investing in and restructuring their approach to primary care. Even tech giants like Apple and Google spent last year “reshaping their healthcare strategies and redefining their value to the field.” Big retailers are leading a shift from products to services, such as — primary care, physical therapy, labs, counseling, imaging, optometry, and more.
What Does This Mean for Medical Office Buildings?
Despite concerns that telemedicine could drastically impact medical office building (MOB) real estate, the sector is holding steady.
Forbes reports that healthcare retail tenants are “an exciting prospect for landlords who’ve dealt with less reliant tenants highly impacted by the pandemic.” Tenants offering healthcare products and services are essential to society and prove to be a stable bet for MOB owners and landlords.
MOB office sales had a record-breaking year in 2021, “with sales volume shattering the all-time record and totaling $18.3 billion, or 15.3 percent higher than in 2017.”
Biotech and Medtail
The growth of medical CRE has created an opportunity for healthcare providers and life science/biotech researchers to expand their impact. Biotech is a rapidly expanding real estate asset class. This expansion sparked an office-to-lab conversion movement, “totaling 9.9 million square feet in the 12 top life sciences markets at the end of 2021.”
Now more than ever, consumers are asking for convenient, low-cost healthcare, and the idea of seeing your provider, grabbing coffee, and picking up medication all in the same space is the beauty of “medtail.” Healthcare providers are increasingly moving into retail hubs in an effort to normalize the idea of consumers utilizing medical care in retail areas. These locations are often more convenient and easily accessible for patients.
Technology advancements in appointment scheduling and patient portals have simplified in-person visits and communication between patient and provider. Premise Health reports that “many of the technologies launched or improved during COVID-19 are being more fully integrated into existing care models.”
In-person visits are a vital care-plan element for many Americans, including those who need physical therapy, have skin disorders, chronic illness, or are post-operation. Now that healthcare technology has had an upgrade, in-person visits can be better than ever. This growing hybrid delivery format also cements a positive near-term outlook for the medical office asset class, making it a continued bright spot across commercial real estate markets.