On October 2, I had the opportunity to serve on a panel sponsored by the Press Herald on health care related real estate trends in the Greater Portland Maine area.
With me on the panel were Charlie Therrien, Senior Vice President of Northern Light Health and president of Northern Light Mercy Hospital; and Jessica Estes, Partner and Broker with The Boulos Co. The panel was moderated by Carol Coultas of the Press Herald. A full summary of the panel is here.
The panel was timely as southern Maine and the Greater Portland area have experienced growth in health care related real estate both in the cities and suburbs. Key lessons from this panel are as follows:
- Health care/medical related real estate continues to grow in demand and supply. This is being driven by several factors including an aging population that is living longer requiring more services, advances in technology and medicine making more procedures and treatment possible, and increased insurance coverage in the past decade (though significant underinsurance still exists).
- The demand and market supply are generating dichotomous results: centralization as well as distribution; larger as well as smaller. Ambulatory and specialized and outpatient care are becoming increasingly decentralized and spreading from the city centers (in this case Portland Maine) to edge city and suburban communities and corridors. This includes the “retailization” of heath care through minute clinics, and urgent care urgent care facilities with small footprints and dispersion throughout the region. At the same time major hospitals in the region are growing larger. They are doing this partly to meet the demand for technology-intensive care used to address major health problems requiring overnight stays as well as the demand to meet the needs of larger geographic footprint for this kind of care.
- Health care and medical real estate are increasingly part of mixed use developments. Health care and medical office have become increasingly important within mixed use environments to support and compliment other office uses retails, and service. Often, they serve as a critical anchor to the market feasibility of these sites.
Several challenges remain and were discussed as part of this panel including:
- Telehealth offers an opportunity for even greater distributed care but is being held back by lack of adequate broadband as well as outdated insurance policies limiting care.
- Pay as you go models serving the mild health care cases leaving the most difficult cases for larger hospitals who are also facing the need for large investment to continually update technology and facilities to support them along with policies requiring them to provide care to everyone.
- Workforce shortages leaving positions unfilled and severally limiting growth.
These are all important trends for economic developers to continually monitor as they relate to targeted development projects, districts, and corridors. For more information on trends see also: