Leading Market Series Round Two: Healthcare
Credit: Marissa Dobaldo with Arizona Builder's Exchange
By Tasha Anderson for Arizona Builder’s Exchange
Last month, AZBEX began the Leading Market Series, a new monthly event that focuses on a specific market sector and brings in top owners for a panel discussion on what they have in the works. While higher education was the topic of choice for March, this time attendees gathered at the DoubleTree by Hilton on Thursday, April 5th for an update on the healthcare market.
The presentation began with a brief glance into the state of the healthcare market as of the end of 2017, using information collected from the AZBEX Database.
“Healthcare counts for 4.55 percent of the total construction market, or $480M, in 2017,” said AZBEX Market Analyst Lya Parrish. She went on to highlight the top owners in the healthcare market with the two largest being Maricopa Integrated Health System and Banner Health, both of whom account for 32 percent of project ownership within the market.
Parrish’s analysis of the healthcare projects listed in the AZBEX Database also showed 8 percent of projects have yet to assign a design/architectural firm and 38 percent of projects have yet to assign a general contractor/CM@R.
New Development
After the brief glance at the state of the market, AZBEX Owner Rebekah Morris introduced the panelists: Michael Brinkley, Arizona Healthcare Strategic Advisor at Pacific Medical Buildings, Sheila Schmidt, director of healthcare real estate development at Ryan Companies, and Chuck Kennedy, principal at Grosvenor Holdings.
Each panelist was asked to provide an update on major projects they have in the works.
One of the major project updates was on the Sierra Bloom Wellness Campus being planned in Scottsdale.
“We have improved construction drawings for Horseshoe Road. We have our contractors in town today and we’re meeting with some subcontractors trying to finalize our subcontracts so that in the very near future you’ll actually see dirt moving,” explained Kennedy.
“The entire campus at build-out… is projected to be between 500KSF-600KSF and we believe we’ll be completely built out in 36-42 months.”
Kennedy went on to list other vertical projects within the campus, including a new 128KSF assisted living facility, a 71SKF behavioral health facility and an 80KSF medical office building.
Other projects mentioned were:
- A 60KSF medical office building developed by Ryan Companies in partnership with Plaza Companies
- An 80KSF medical office building at the Mercy Gilbert Medical Center Campus developed by PMB LLC
- MIHS’ Maryvale Behavioral Health Hospital
Brinkley went on to mention a purchase of several sites by MIHS for new clinics, saying that announcements for design and construction should be made within the next few months.
An Uptick in Behavioral Health
During the discussion about market conditions and future development, the panelists seemed to be in agreement that behavioral healthcare is trending upward, the driving factor being a need for new facilities and reimbursements due to the passage of the Affordable Care Act for behavioral health services.
“I think we’ve all seen an uptick in the health system wanting to get back into behavioral health because now they’re getting reimbursed for that and there’s a tremendous need, so now it’s almost who can get to the sites that won’t have strong opposition first,” said Schmidt.
“We actually commissioned a study that’s two years old now,” said Kennedy explaining the need for more behavioral health clinics. “There was a shortage in that particular study that was projected to be 1700 beds in Maricopa County.”
Plenty of Opportunity
Toward the end of the presentation, Morris asked the panelists to shed some light into how design and construction firms can do business with their companies.
While Kennedy spoke of limited opportunity for Grosvenor Holdings and Brinkley mentioned hiring local contractors for PMB LLC, Schmidt hinted about upcoming opportunities for Ryan Companies and encouraged attendees looking for opportunities to reach out to their pre-construction department.
“There’s actually a tremendous amount of opportunity right now. We’ve had some recent wins… and we have another nice announcement coming in the next few weeks, so we definitely need additional resources,” she said.
Once again, the AZBEX Leading Market Series was well received and attendees gained insight into the current state of the healthcare market as well as future opportunities.
The next Leading Market Series topic will be on Public-Private Partnerships (P3). To check out dates and topics or to register for the next event, visit: http://lms.azbex.com/
NOTE: Paid subscribers receive additional project details in our twice-weekly PDF publication, including project stakeholder information and valuable project bidding leads. Find out more about AZBEX subscriptions or contact Rebekah Morris at rmorris@azbex.com or (480) 709-4190
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