January 10, 2018

Future of Healthcare All About Patient Experience

Lisa Brown

SAN RAMON, CA—With healthcare demand showing no signs of waning due to the aging population, cost pressures and technology breakthroughs, more medical facilities are hitting the market across the country, prompting new personnel to manage assets. Meridian recently hired Linda Shoemaker Haskins to serve as vice president of asset management, overseeing management of Meridian’s properties in Northern California.

In an exclusive, John Pollock, chief executive officer of Meridian, recently discussed the demand for healthcare, locations of choice for developers and the outlook for medical real estate going into 2018. How did we end the year with regard to healthcare CRE, on a record/high note or demand left unfilled?

Pollock: 2017 ended with a flurry of activity for Meridian. We executed a significant lease on our available space in Berkeley, CA, traded and signed LOIs for sizable vacancies at our properties in Laguna Hills and Pasadena, CA, and closed escrow on a 0.68-acre development site in Long Beach, CA. We also successfully entitled two additional sites in Northern California for ambulatory outpatient clinics. What are some of the features of MOBs that have been developed recently that really hit it out of the park in terms of uniqueness?

Pollock: Meridian delivered an Office of Statewide Health Planning and Development/OSHPD3, a 12,750-square-foot outpatient clinic to a user on a dense urban infill 17,600-square-foot parcel on a vibrant retail corridor in Oakland, CA. The clinic was wedged between a Blue Bottle Coffee and a Firestone Auto Care center, with great visibility, easy access and ample parking, which are all hallmarks of a medical office building that can provide a great patient experience. As Boomers continue to age, are MOBs going into more mixed-use developments for ease of access or still clustered by hospitals or a bit of both?

Pollock: Clustering MOBs near hospitals will be a hard habit to break, but it is clear that the future of healthcare is all about the patient experience and reducing the costs for delivery of care. The retailization of medicine will continue to push healthcare providers to provide care in locations that are convenient, easy to find and simple to navigate. Keeping patients out of the emergency room is critical. A mix of complementary amenities will ensure a great patient experience in an outpatient care environment. What is the outlook for healthcare CRE as we start 2018?

Pollock: The fundamentals remain strong. Demand from Boomers will continue to put pressure on capacity and Millennials will challenge the way we have historically delivered care. Both cohorts want convenience, access and customized care through various means of technology. Healthcare providers will need to reimagine delivery of care, and the resulting impact on the physical spaces should provide for another great year in healthcare real estate.

Meridian is a full-service real estate developer and owner of medical and general office real estate with offices in both Northern and Southern California. A division of Marcus & Millichap Company, Meridian has specialized in the development of commercial and medical office since its inception in 2000. Meridian’s services range from site evaluation and land acquisition to entitlement and planning to construction and management.