Heading into 2010, views for the New Year are somewhat varied. The main issue and everyones main concern is the impact of healthcare reform. Healthcare providers have been eager for some sort of closure because the uncertainty has kept many medical real estate decisions in limbo. Many physicians and other healthcare providers have been waiting to see how healthcare reform will impact their reimbursement rates that directly affect their incomes. Some medical projects have been shelved because of the unresolved debate regarding healthcare reform. The uncertainty makes it difficult for healthcare providers to project future business models.
In addition, this has caused physicians to delay long term decisions regarding their office space. The passage of some sort of healthcare reform would have a positive effect on the medical office building market. This would also contribute to more outpatient utilization and increase the demand for medical office space.
This uncertainty, in addition to the ailing economy and real estate slump, continues to have a negative effect on the medical office market. For physicians who are looking to lease or purchase space, it is a good time to structure favorable deals. Location is the key to the acquisition decision. We are aware of healthcare professionals who left their core area of practice to acquire an office at a very advantageous price. However, what they did not take into account was the number of existing patients they would lose as a result of such a move. No matter how good a deal a physician can strike in a building, if it results in losing patients, it is not a wise move. The exception to this however, could be an additional location for a satellite office.
Despite the effects of all of the above, many medical office projects in South Florida have done well and should continue to do so. The healthcare industry remains one of the few growing segments of the economy. As a result of the growth of the baby boomer population, there is an increased demand for medical facilities ranging from physician offices, urgent care centers, ambulatory surgical centers, diagnostic centers and specialty treatment centers.
Although leasing activity has slowed, the medical office building market is still fairly stable. It continues to have a more positive outlook than other commercial sectors. The successful medical properties are doing well because the landlords are knowledgeable of the market and plan their marketing efforts based on the needs of the healthcare providers.
Another driving force for medical office space is the shift of medical care from in patient to outpatient focus. Some experts forecast an increase in the demand for outpatient development. Because of the large base of baby boomers, healthcare providers are in the expansion mode. They have also been involved in new outpatient centers, as well as expanding into the emerging growth areas. There is a shift in the focus of healthcare from the hospital to the outpatient or ambulatory setting.
In addition, as a result of losses in investments and the sagging economy, many physicians plan to delay their retirement.
New medical office project trends focus on a propertys visibility and ease of accessibility. Among these are medical malls or healthcare offices in mixed-use projects. The retail sector is in the worst shape it has been in many years. The concept of putting healthcare providers in retail centers can be advantageous to both the landlord and tenant. Healthcare providers represent long term tenants with stable financials for the landlord. We are presently involved with several of these projects, and we continue to receive many inquiries. This concept has been tried in the past with mixed results. These kinds of projects require a thorough knowledge of healthcare real estate to be successful. Some of the projects that failed were poorly designed and marketed.
Heading into 2010, views for the New Year are somewhat varied. The main issue and everyones main concern is the impact of healthcare reform. Healthcare providers have been eager for some sort of closure because the uncertainty has kept many medical real estate decisions in limbo. Many physicians and other healthcare providers have been waiting to see how healthcare reform will impact their reimbursement rates that directly affect their incomes. Some medical projects have been shelved because of the unresolved debate regarding healthcare reform. The uncertainty makes it difficult for healthcare providers to project future business models. 
