CREJ

Page 4 — Health Care & Senior Housing Quarterly — April 2021 www.crej.com HEALTH CARE — MARKET UPDATE W hile all commercial real estate owners and devel- opers were faced with new operational hurdles and dwindling new leasing this past year, those who are responsible for health care facilities have piv- oted and found inventive ways to adapt their medical office facilities to a post-pandemic environment. Stay-at-home orders and social distancing led the health care real estate industry to shift its models completely for the long term. The COVID-19 pandemic has been the catalyst for health care facilities to acclimate to our ever-evolving vir- tual world. From on-campus medical office buildings to storefronts in retail settings to stand-alone ambula- tory surgery centers, each had to navigate the complicated waters of operating through a pandemic. Health care building owners, devel- opers and property managers have looked to incorporate the latest health and safety technologies by retrofitting existing buildings and designing new projects with the pandemic in mind. They continue to find innovative ways to modify preexisting systems and redesign spaces to ensure their assets are safe environments for all. They are working to ensure that patients feel safe walking through the doors and that doctors and health care profes- sionals are protected when caring for the sick. In challenging economic times, it’s easy for businesses to talk at customers. Instead, businesses first must listen. In the health care real estate indus- try, there never has been a time to better under- stand physician and tenant senti- ment within one’s facilities. Now is an opportunity to identify tenant and patient pain points that arose or intensified dur- ing the pandemic. Once specific challenges have been identified, the health care real estate industry can personalize offerings to truly match tenant and market demands. Developers, own- ers and property managers must remain mindful of tenant anxiety in this current economy. There still are many unknowns in the health care landscape. Messaging must be made with the utmost thoughtful- ness and empathy, as tenants are seeking comfort and stability. Those industry professionals who are compassionate, flexible and trans- parent will thrive. By assessing current challenges, the market’s rapidly evolving demands can be met. Next, and here’s the fun part, developers and owners should identify ways to pivot so their products or ser- vices meet tenant needs. It is time to think outside the conventional parameters of the health care real estate industry. n Move-in ready suites. Medical office buildings with significant second-generation space often lack occupancy-ready medical suites. The pandemic led to lon- ger than usual permit lead times and standard construction materials are becoming more costly for construction build-outs. Landlord-funded, move- in ready spec suites offer tenants the ability to make quick decisions on new spaces during these uncer- tain times. These move- in ready suites provide options for tenants who have put off making deci- sions during the pandemic and need quick occupancy. They also provide opportu- nity for single practitioners who don’t have the ability to come out of pocket on excess construction costs beyond market tenant improvement allowances. n Virtual platforms. Health care real estate has long struggled at gaining expo- sure through marketing efforts to the end users and/or C-suite decision- makers. Creating a robust online presence for an asset to include property websites, 3D virtual tours of buildings and vacancies, and social media advertis- ing is critical to success- fully leasing the property. It also is extremely important that a property’s marketing materi- als and collateral are up to date and reflect the current environment. Owners should fight the urge to remain status quo and bring their marketing into the digital realm. In an industry like commercial real estate where most deals are made face-to-face, the pandemic Products, services pivot for life after pandemic Stephani Gaskins Senior associate, CBRE Move-in ready suites, like this spec suite in the Sky Ridge Aspen Medical Office Building, are becoming more in demand as the pandemic has caused longer than usual permit lead times and more costly con- struction build-outs. Please see Gaskins, Page 14