- S&P Global Ratings published a sector view report on the nonprofit hospital sector, indicating the agency expects a constrained operating environment in 2024 largely due to persistently high labor and operating costs. Another factor behind the negative outlook is that health care providers are restarting deferred capital projects and potentially looking to debt to help support spending and preserve reserves, creating more balance sheet pressure.
- Before it embarked on its current $3B development in Detroit, Henry Ford Health purchased more than 300 parcels of real estate surrounding its main hospital campus, with the first of such acquisitions dating back to the early 2000s.
- Senior living and long-term care deal volume is down going into 2024, which experts attribute to high interest rates, higher cap rates, slower recovery in occupancy, increased operating costs and challenging labor markets. Medicaid funding changes are also accelerating the move from nursing homes to home and community-based services.
- Starting January 1, 2024, many privately-owned entities, including health care providers, will be subject to ongoing disclosure and reporting obligations required by the Corporate Transparency Act, including information about entities’ beneficial owners. Some exceptions do exist, such as for entities with more than $5M in annual revenue and 501(c)(3) organizations.
- Walgreens-backed VillageMD announced plans to close all 12 of its Village Medical practices in Indiana and 10 in the Jacksonville, FL market, effective in January 2024. The closures stem from Walgreens’ larger cost-cutting plan announced in October that involves closing 60 VillageMD clinics in five markets to save $1B.
- Jefferson Health and Lehigh Valley Health announced plans to merge in 2024, creating a system of 30 hospitals and more than 700 care sites in PA and NJ.
- There were 116 new ASCs reportedly built in 2023, with California opening the most (10), followed by Florida, Texas and Wisconsin (with seven each). Fifty-five of the new ASCs were opened by hospitals or health systems.
- Kaiser Permanente’s new 310-bed hospital in Sacramento could cost nearly $1.5B according to a recent fee estimate. That is 50% higher than Kaiser’s initial estimate for the project six years ago.
- Novant Health filed several building permits for interior work related to its new $130M bed tower expansion at Matthews Medical Center (Matthews, NC). The project includes a 150k-sf expansion and renovations of another 50k-sf of existing space.
- AdventHealth broke ground on a new $271M hospital in Minneola, FL. The facility will be a 4-story, 204k-sf, 80-bed hospital with an ED, imaging and five operating suites.
For more information on real estate matters, please contact:
- Andrew Dick at adick@hallrender.com or (317) 977-1491;
- Joel Swider at jswider@hallrender.com or (317) 429-3638; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
