Health Care Institute News
Healthcare Landscape Push NC Healthcare Pros to Explore New
||by Megan Headley | Mar 22, 2018
A changing healthcare landscape and a focus on
location were focal points of the discussion that occurred at
the Southeast Hospital, Outpatient Facilities & MOB Summit 2018,
organized by SquareFootage.net and co-hosted by the Health Care
Institute. The event took place in Charlotte, N.C., in March.
As reported by Laura Williams-Tracy, mergers and acquisitions
continue to shake up the healthcare landscape into 2018. Blair
Childs, senior VP for Public Affairs, Premier Healthcare
Alliance’s office in Washington, D.C., highlighted the latest
shake-ups—including the CVS acquisition of Aetna; merging health
systems, such as Aurora Health Care with Advocate Healthcare;
and major technology disruptions to the industry from Amazon,
Google Health and IBM Watson.
“We are overall changing the competitive structure of the
healthcare system,” Childs noted. “These are big, big changes
that are occurring that have a big impact on how people think
Providers continue to expand from single community markets to
larger regional markets with more standardized care across the
continuum. Yet as systems grow their reach, a focus on location
becomes increasingly important as a competitive edge.
Yet the new retail competitors such as CVS and Walgreens
understand site selection better, noted Andrew Lawler, partner -
healthcare development with The Keith Corp.
Lawler explained during a presentation on the forces driving
direction of healthcare real estate and acquisitions that
healthcare providers can’t afford the retail locations that CVS
and Walgreens already hold, so are focusing on prime locations
that aren’t necessarily at the corner of Main Street. “We
haven’t cracked that code yet. Retailers are more sophisticated
in site selection,” he noted.
Location was the driving factor in Duke Health’s decision to
purchase an old Macy’s department store with in Durham, N.C.,
for $4.5 million, explained Scott Selig, AVP Real Estate &
Capital Assets, Duke University Health. The 90,000-square-foot
building came with 900 parking spaces. Now the system is
considering whether to renovate the building or tear it down and
build a new, taller building.
“We bought the building for its location. We got a better
location with visibility off I-85 for less money than we could
have even built the parking spaces,” Selig explained.
Selig went on to share that these innovative repurposing
projects have their challenges. Closing this deal brought
challenges around restrictions and easement agreements.
Ultimately Duke Health spent $150,000 on legal fees before it
even closed the deal.
Tim Spence, National Healing Director, BSA LifeStructures, added
his insight on repurposing in sharing a case study on how the
firm converted a former grocery store into a medical office.
That experience taught him that Interior upfits can be the
expensive part of such projects.
Older buildings often have dated roofs, are energy inefficient,
and lack insulation to meet code. Under-sized elevators and fire
escapes can be expensive fixes. As such, Spence encouraged his
audience to take time to complete due diligence before buying an
older building—and be ready to walk away from the deal if
Understanding these challenges will prove crucial for health
systems, as medical real estate activity is only likely to
increase in the near future.
To read the full event takeaways, visit