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Feature Story: Who’s your biggest competitor? It might be your client

More hospitals and health systems are investing and self-developing, InterFace panelists say

By John B. Mugford

The InterFace HRE West “State of the Industry” panel included (from left to right): Murray W. Wolf of HREI, Dan Prosky of AHI, P.J. Camp of H2C, Mark Toothacre of PMB, John Pollock of Meridian and Roman Kupchynsky of MedProperties Realty Advisors. (Photo courtesy of InterFace)

As a panel of well-known, leading healthcare real estate (HRE) executives talked about the state of their sector at a conference in Los Angeles recently, it became clear that third-party investors and developers today are facing relatively new competition from the entities they ultimately are looking to serve.

Their competitors, in a growing number of instances, are the health systems themselves, both strong regional and national systems that are doing well financially have a very low cost of capital.

“As far as ROFRs (rights of first refusal) being exercised (by health systems) on ground leases or purchase options, I certainly see a lot more of that now than we did 10,15 years ago,” said Danny Prosky, founding partner with Irvine, Calif.-based American Healthcare Investors LLC, a co-sponsor of a series of Griffin-American Healthcare REITs.

“We are seeing a fair amount of hospital systems buying back their real estate assets,” added Philip J. “PJ” Camp, principal and co-founder of New York-based Hammond Hanlon Camp (H2C), an investment banking and advisory firm focused on healthcare.

Messrs. Prosky and Camp made their comments during a panel discussion during last week’s 11th annual InterFace HRE West conference Feb. 19 at the Omni Los Angeles. Moderated by Murray W. Wolf, publisher of Healthcare Real Estate Insights, the panel session was titled: “State of the Industry: What’s the Outlook for 2020 from an Investment, Development and Leasing/Operations Perspective?”

Also on the panel were: John Pollock, chief operating officer of San Ramon, Calif.-based Meridian, an HRE development firm; Roman Kupchynsky, managing principal of Dallas-based MedProperties Realty Advisors LLC, an investor in HRE developments and acquisitions; and Mark Toothacre, president and partner of San Diego-based PMB, a long-term HRE facility developer and owner.

While the general consensus among the panelist was that the HRE and MOB sector remains strong, with plenty of opportunities for investors and developers on the horizon, the sector has changed and continues to change.

One of the biggest changes of late, they noted, is

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