Principals Mark Davis and Jill Rasmussen and other panelists shared insights on how to lease up medical office buildings during a session at the industry’s largest national event
MINNEAPOLIS, May 16, 2019 – How do medical office building (MOB) owners and managers partner with health systems and physicians to successfully convince them to be tenants in their facilities?
Davis Principals Mark Davis and Jill Rasmussen shared insights on this topic in an educational breakout session at the 2019 Building Owners and Managers Association (BOMA) International Medical Office Buildings + Healthcare Real Estate Conference May 2 in Minneapolis.
Other participants in the session titled “Recruiting Physicians: Strategies to Fill your MOB” included Douglas Davenport, Chief Financial Officer of NorthEast Iowa Region, MercyOne, and moderator Matthew Sullivan, Managing Director of Cushman & Wakefield.
The BOMA MOB conference, the healthcare real estate (HRE) industry’s largest annual event, attracted a near-record crowd of more than 1,300 healthcare providers and HRE professionals. And the fact that this year’s conference took place in Davis’ home market afforded the panelists a perfect opportunity to use one of the firm’s local projects as a timely example of successful tenant recruiting strategies. The session focused on the award-winning 147,885 square foot HealthEast Clinic & Specialty Center in the St. Paul, Minn., suburb of Maplewood, Minn., that was developed by Davis, a national healthcare real estate development, property management, brokerage and investment firm based in Minneapolis.
Mr. Davis explained how anchor tenant HealthEast had initially required 82,000 square feet in the facility but that after construction began, the health system requested an expansion to accommodate additional services and specialties. Shortly thereafter, space demands from affiliated groups drove a second building expansion.
“A significant accomplishment was that Davis was able to expand the building twice after construction began to meet increased tenant demand, and we were still able to deliver the completed facility within 30 days of the original target date,” he noted.
“When we opened the medical center, it was more than 90 percent leased,” Mr. Davis added. “Our great partnership with Doug Davenport and the HealthEast team really allowed us to bring in the services they wanted to complement their programs and services and help them fulfill their overall goals and strategy.”
Mr. Davenport, who is now with MercyOne but was a Senior Vice President and the CFO for HealthEast at the time, agreed.
“We were able to consolidate all of our off-campus specialties into a convenient, one-stop multispecialty medical center. We created a destination healthcare hub for our patients,” he said.
Mr. Davis said the development and design team went to great lengths to make the new medical center inviting for patients as well as physicians. Features include light-filled rooms; a “floating” glass staircase; a player grand piano and fireplace in the lobby; colorful, original artwork designed by local artists; and a dichotic glass art piece that changes colors based on the intensity and direction of the light.
“We created a warm, comforting environment so that patients have a very different experience when they visit compared to many other facilities,” Mr. Davis said.
Davis Principal Jill Rasmussen said that to meet HealthEast’s objectives as well as Davis’ occupancy goals, the team sold more than just tenancy in the building. “We sold a vision of a one-stop-shopping experience for patients that gives physicians the ability to expand their patient base,” Ms. Rasmussen said.
Davis used, and continues to use, as many tools as possible to lease space as quickly as possible, she continued. This includes professional marketing materials such as brochures and postcards with strong visuals that show the facility’s amenities and selling points such as the beautiful design, highly visible signage, ample parking and good tenant improvement allowances. They also market to healthcare brokers and do follow-up calls.
“And if we can’t get a prospective tenant to visit the building, we send them the building – a video of it,” Ms. Rasmussen added.
“We also offer timeshare arrangements when necessary to get prospective tenants interested. In addition, we use creative financial strategies, such as relocation assistance, to recruit tenants that complete the desired tenant mix.”
Davis, founded in 1986, is a national healthcare real estate firm that offers unparalleled expertise in healthcare real estate development, property management, brokerage, investment and consulting services to health systems, hospitals, individual medical groups, specialty practices and other healthcare organizations. Over the past five years, the company has developed 20 Class A medical buildings totaling $250-plus million in development costs and completed 20 investment transactions totaling more than $400 million. It has also negotiated more than 250 healthcare property leases totaling 1.2 million square feet during that time. For more information, please visit www.davishre.com.
– 30 –
The full content of this article is only available to paid subscribers. If you are an active subscriber, please log in. To subscribe, please click here: SUBSCRIBE