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Dallas-Fort Worth Physicians Driving Hot Market Growth

  by Megan Headley | July 18, 2017


  The Dallas-Fort Worth healthcare market remains hot, reported the experts at the North Texas Hospital, Outpatient Facilities and MOB Summit, held in Dallas in June. “Too hot,” said Wes Huff, Vice President of Real Estate, Baylor Scott & White.

Huff and others noted that while anything can change in a moment, physicians are increasingly forming physicians groups to offset reimbursement pressures and reduce the costs of running their businesses—and they’re looking to construction, real estate and development experts to guide them in this process.

According to a recap of the event organized by SquareFootage and co-hosted by the Health Care Institute of IFMA and HCI North Texas, physicians are realizing there’s power in numbers. However, most have never built medical office buildings, making the risk high due to lack of experience. By working with a knowledgeable team that knows the process can minimize that risk.

The experts at a session on factors driving the North Texas healthcare real estate market commented that “the sweet spot” is about 6,000 square feet for medical buildings for smaller physician groups, and up to 30,000-40,000 square feet for larger, multi-specialty groups. They also advised encouraging smaller practices to consider larger buildings.

“If you develop a 6,000-square-foot building, the market is good but not as good as if you had a larger building with other investors,” commented Rich Couturier, Vice President of Development, Ryan Companies.

Experts at the event also commented on hospital real estate trends. They predict that over the next 30 years, as the 85+ population grows, the market will see more facilities that cost less per night for a patient stay—think a night of senior housing for $150 to $200 a night, versus a $20,000 hospital stay.

In the meantime, expect the trend toward more ambulatory, outpatient services, with greater construction of micro-hospitals, day facilities and short-stay facilities. Keep in mind, designers caution—this will mean that medical buildings will become far more complex as they take on additional services once found only in the hospital.

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