"This was a great event that attracted industry titans - from brokers and developers, to systems, to debt and equity. 2017 was the biggest year on record for healthcare, which comes as no surprise as it was marked by huge portfolio deals. Additionally, we heard that there was a general optimism that 2018 would also be a healthy year.  That being said, John Winer of Seavest shared some statistics in the Valuation Session that indicate some potential storm clouds on the horizon; the narrowing spread between treasuries and cap rates of medical office buildings, and price per square foot nationally that is well in excess of replacement costs. In the core West Coast markets, price per square foot is well above replacement cost; however, there are virtually no available sites for development. Meridian has found success in the adaptive reuse of existing structures in these land constrained markets and we have been able to creatively solve requirement for our clients. At the end of the event we concluded that we are in a dynamic industry that is rapidly changing. There is no question that things are moving quickly to an ambulatory model that is far more distributed. Meridian is excited to partner with systems and providers to think outside the box and come up with creative ways to drive down occupancy cost as we all work to drive cost out of the system." - John Pollock

"On the investment side, we discussed that there is no shortage of equity hunting for well located value add deals. Outpatient buildings don’t necessarily need to be located on campus, as long as they are affiliated or aligned with a major system. The hope is the systems expand by recruiting or acquiring new doctor groups, further reducing the investors' risk. The tenant mix and referral flow are also extremely important right now. MOBs with ambulatory surgery centers (ASCs) have significant upfront build-out costs. Those ASCs generally don’t move and become the anchor of the building if they operate well and remain profitable. On the Build-to-Suit side, development yields are still being pushed down and spreads continue to compress. Healthcare systems, some with in-house development capability already, are beginning to look at outside developers to help locate and assemble new sites, while pushing budget and schedule risks on to the developers. Moving forward, Meridian will remain flexible in its deal structures to provide creative real estate solutions for healthcare providers needs. Big thanks to Mike Hargrave with Revista for putting together a great conference." - Mike Conn