Weekly Health Care Real Estate Briefing: BJC Healthcare and St. Luke’s in Kansas City plan a $10B Merger | IU Health to Issue $726M in Bonds | Humana Opens 250th Primary Care Center

BJC Healthcare and St. Luke’s Health System of Kansas City have announced plans to merge. The merger will result in a $10B health system with 28 hospitals, more than 100 care locations and 5,200 physicians.
Henry Ford Health announced plans to raise hundreds of millions of dollars to fund a portion of the cost of its $1.8B hospital expansion and a new research facility being developed with Michigan State University.
Sutter Health will be expanding the scope of its services in northern California. Sutter plans to issue $750M worth of bonds to cover the cost of additional services, including adding more than 24 new ambulatory care centers.
Indiana University Health announced plans to issue $726M in bonds to fund a portion of the cost of its $4.3B new hospital campus in downtown Indianapolis and to expand its Saxony Hospital in Fishers.
Hall Render Advisory Services is working with a health care provider to reposition a Class A, 39,000 sf on-campus building in the Dayton, Ohio area. The facility was built in 2020 as a high-end free-standing hospice facility. It could be converted into a specialty hospital or outpatient facility. If interested, download the brochure, or contact John Marshall for details.
AdventHealth outlined its current growth plans in a new article. Advent is either building or planning to build new hospitals in Colorado, Florida and Kansas, and it has plans to add 10 new senior care clinics and 50 urgent care centers around the country.
Humana’s primary care division, CenterWell, has opened 250 clinics to date. CenterWell focuses on primary care services for aging adults. CenterWell plans to open an additional 30 to 50 clinics per year over the next few years.
The Phoenix metro area continues to be one the most active hospital development markets in the country. According to a new article, Banner has announced projects in Gilbert, Mesa, Phoenix, Scottsdale and Tucson, while Abrazo Health is working on projects in Buckeye, Cave Creek, Glendale and Surprise. DignityHealth, HonorHealth and other providers are working on projects as well in the metro area.
A new article describes the development plan for the 70-acre OneRise behavioral health campus in south Wichita. The campus will include a behavioral health hospital, a community care center that will provide social services, affordable housing, supportive housing and child care services.
Marcus & Millichap released a new medical office report. MOB vacancy has been relatively flat over the past few years. Nationally, MOB vacancy is at 9.2%; traditional office buildings have a 17.5% vacancy. Vacancy in retirement hotspots like Dallas, Phoenix, San Antonio and West Palm Beach have dropped around 200 bps. MOB sale prices are around $300/sf. MOB transactions are slowing down as a result of the credit crunch. In 2022, 75% of MOB financing came from local, regional or national banks.