Weekly Health Care Real Estate Briefing: Nursing Home Providers Protest Minimum Staffing Rule | On-Campus Medical Office Prices Exceed Off-Campus for First Time Since 2020

Over 500 nursing home providers gathered in Washington, DC recently to protest an upcoming minimum staffing rule that CMS is currently drafting. Industry trade groups and providers are concerned about the financial pressure they may face under the rule.
KPC Promise Hospital may be evicted from Merit Health River Region Hospital in Vicksburg, MS. Merit terminated Promise’s lease after allegedly failing to “fulfill its contractual obligations” for more than a year. No lawsuit has yet been filed by either party.
On-campus medical office asset prices exceeded those of off-campus assets in Q1 2023 for the first time since Q1 2020, according to a report from Cushman & Wakefield. Since 2020, off-campus real estate transactions have held an average 5% price premium over on-campus transactions, but the limited availability of on-campus assets has led to the recent price premium for on-campus space.
Industry executives speaking at Bisnow’s Boston Healthcare Real Estate Summit said providers are making the offices and medical spaces they have more efficient rather than expanding. Health systems are pushing more services into outpatient facilities, and some are considering creative ways to bring care to patients, including home care and mobile clinics.
A recent report on construction activity in southern California noted that health care projects have played a significant role in keeping the construction industry at work, while office projects have virtually disappeared.
Atrium Health broke ground on a 30-bed hospital in the growing Charlotte suburb of Cornelius, NC. The project will include nearly 30% women, minority or veteran owned construction companies and is a part of Atrium’s $1B capital expenditure investment plan announced in 2018.
Public REIT Healthcare Trust has completed a $240 million commercial mortgage-backed security loan encumbering 62 medical office buildings across the United States. The loan has a 10-year term and an interest-only rate of 6.453%.
Orlando Health submitted a development plan for its pending replacement behavioral health hospital in Apopka, FL (an Orlando suburb). The proposed facility would be developed under a joint venture with Acadia Healthcare and would feature 144 beds and 100,000 sf of space.
Trinity Health broke ground on a 96-bed psychiatric hospital in Byron Township, MI (near Grand Rapids). The $46M hospital is expected to employ 170 medical professionals and will be jointly operated by Trinity and Universal Health Services.
Physicians Realty Trust released its fourth annual ESG Report, detailing its investments in environmental, social and governance objectives, such as reducing emissions, increasing use of renewable energy and increasing its spend with diverse vendors at its facilities.