Feature Story: Developers need to ‘add value’

InterFace Carolinas panelists say higher costs have changed the game

By John B. Mugford

The InterFace HRE Carolinas development panel featured (from left to right): Tommy Catone of Summit Healthcare, moderator Laura Cardner of Healthcare Realty, Alan Jenkins of Meadows & Ohly, Bret Muller of Capital Associates and John Stubbs of Davis Moore. (Photo courtesy of InterFace Conference Group)

According to statistics, healthcare real estate (HRE) development is on the rise throughout the country.

As noted in the “What’s Trending?” feature at the bottom of this edition of the HREI™ weekly e-newsletter, a recent report from the U.S. Healthcare & Life Sciences Real Estate team with CBRE Group Inc. (NYSE: CBRE) indicates that there was a total of 39.3 million square feet of medical office building (MOB) space under construction nationwide during the first quarter (Q1), a 25 percent increase from a year earlier.

The panelists during the recent InterFace HRE Carolinas Conference in Charlotte, N.C., cited this statistic, indicating that their development firms are quite busy, especially during a time when many hospitals and health systems are struggling financially and turning to development firms to build buildings for them. They also pointed out that the recently lifted Certificate of Need (CON) law in South Carolina, which will fully sunset in three years, will likely propel development in that state, as the repeal of the CON law in Florida has done in recent years.

They also mentioned that many markets in North Carolina continue to grow, creating demand for new medical facilities.

“We’ve been blessed to have a lot of opportunity over the last several years – despite all the challenges in the marketplace – and we’ve been doing a lot of projects throughout Florida,” said Alan Jenkins, partner and senior VP of development in the Charlotte office of Norcross, Ga.-based Meadows & Ohly.