InterFace panelists say clients in growing markets see the need for new facilities
By John B. Mugford
The development panel at the recent InterFace HRE conference in Nashville, Tenn., included (from left to right): moderator Lacie Simonton of Choate Construction, Joe Fogarty of Healthcare Realty Trust, Henry Johnson of Freese Johnson, Alan Jenkins of Meadows & Ohly and Matt Mattox of Oman-Gibson Associates. (Photo courtesy of InterFace Conference Group)
With interest rates and construction costs on the rise, some health systems and other providers have put planned development projects on the back burner, hopefully temporarily.
On the other hand, many systems and perhaps larger physician groups that feel they have a need to keep growing their network into new markets are pushing ahead, even though such projects are most likely quite a bit more costly than they would like.
This is the current environment in the healthcare real estate (HRE) and medical office building (MOB) development market, according to experienced HRE developers and construction contractors who were part of a panel session at last week’s 12th annual InterFace Healthcare Real Estate Southeast Conference, which was held Nov. 6-7 at the Doubletree Nashville Downtown.
“For our clients, especially when it comes to growing markets … where they feel they have to have a presence, they feel they have no choice but to go ahead and develop in such a market in order to plant their flag and establish a presence,” said Matt Mattox, senior managing director with longtime HRE development firm Oman-Gibson Associates (OGA), which is based in Nashville and develops projects nationwide, with a heavy concentration on the Sunbelt and Southeast.
“And in many of these targeted markets, there’s no other alternative but to do a greenfield development,” Mr. Mattox added, “and we as a company have been blessed to be in markets where there is a lot of growth from a population and new rooftops standpoint.
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