In 2025, we worked on a number of significant land transactions where hospitals acquired land for new hospital campus projects. From our perspective, it seemed like an increase in land transactions when compared to previous years. Here are 10 observations based on our work on these transactions:
- Resource Race – Hospital systems were aggressive in tying up land in growing markets. In terms of data, markets with high population growth were the primary targets. In states like Indiana, North Carolina, South Carolina, Florida and Tennessee, multiple hospital systems announced new hospital projects in the same communities.
- Parcel Size Matters – We saw several hospital clients seek out large parcels of land for replacement hospital projects. In our experience, hospitals were looking for anywhere between 100 and 200 acres for these projects. For smaller specialty hospital projects, we witnessed hospitals searching for 5 to 30 acres. In some cases, the hospital may ultimately sell or ground lease excess land, but having control is important.
- Casting a Long-Term Vision – Executives leading these new hospital projects did their homework. Many studied how prominent hospitals and academic medical centers have developed campuses over the years. Executives took that information and worked with land use consultants to develop long-range master campus plans.
- Mixed-Use Projects – Gone are the days when new hospitals are developed as a stand-alone facility. Executives were interested in creating mixed-use campuses. Executives were considering complementary uses for their campus projects, like apartments, hotels, retail, senior housing, skilled nursing and specialty providers like ambulatory surgery centers, behavioral health, cancer centers and inpatient rehabilitation hospitals.
- Novel Partnerships – We saw hospitals execute on novel partnerships in connection with their new campus projects. Several hospitals created development partnerships with harmonious users (think developers, physician groups and hotel operators) that agreed to develop new projects (ASCs, MOBs and hotels) that will open at the same time as the new hospital.
- Revenue Play – Executives are looking for ways to generate revenue from their new campuses. Thin hospital margins prompted executives to explore real estate development strategies that can supplement the bottom line.
- Entitlement Strategies – In some jurisdictions, hospitals were welcomed with open arms by planning and zoning officials, particularly in areas where hospitals are desperately needed. In other cases, local officials used the entitlement process to force hospitals into making certain financial concessions.
- Tax Strategies – Non-profit hospital systems in several jurisdictions are being forced into PILOT (payment in lieu of tax) agreements in connection with new hospital projects. In some cases, hospitals agreed to pay taxes in exchange for entitlements or infrastructure credits.
- Economic Incentives – Hospitals sought and secured economic development incentives for new infrastructure associated with their hospital projects. In a number of cases, hospitals secured tax increment financing from local municipalities to help fund the cost of utility infrastructure, roads and parking structures.
- Airspace Restrictions – A number of new hospital projects were designed with multiple heliports. Getting planning and zoning approvals, in addition to federal and local airspace approvals, can be challenging in urban markets. Hiring an FAA consultant is money well spent, particularly early in the process.
For more information, 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.
