The Keys to Success in Meeting the Growing Demand for Medical Office Space

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Joseph Deglomini Jr.The healthcare industry is one of the hottest sectors in commercial real estate today. With the aging of the Baby Boomer generation people are living longer and requiring medical care way into their 80s. In addition, specialty hospitals (focusing on cancer treatment, orthopedics or heart care) to take care of this growing population are on the rise. These trends, combined with the major changes underway with healthcare reform and the growth of large medical practices, lead to the growing demand for state-of-the-art medical office space. In New York, especially in the outer boroughs, we are experiencing this demand and working hard to meet it with a number of new projects. And meeting that demand requires a keen understanding of the needs of the medical community and how to develop medical office space that creates a positive patient experience.

Location has always been a top priority in real estate and nowhere is this more evident than in the medical community. Today's medical practices are becoming more retail based and, as a result, require office locations that offer high visibility as well as ease of access for patients via major highways and public transportation. Locations that allow physicians and patients ease of travel between private offices and hospitals or healthcare complexes, are especially attractive.

We experience the draw of a strong location at Hutchinson Metro Center in the Bronx, a stand-out in our portfolio of more than 1 million square feet of medical space. This 42-acre complex is located directly off the Hutchinson River Parkway, easy to reach from major highways as well as public transit. The complex is also less than a mile from five major hospitals: Albert Einstein College of Medicine, Montefiore Medical Center, Jacobi Medical Center, Calvary Hospital and Westchester Square Medical Center. Since opening the first phase of this complex, we've maintained occupancy rates of nearly 100% and have been adding buildings and making sure to expand roadways and create clear signage to maintain ease of access to each new phase of the development.

Parking and traffic flow are critically important when developing medical space. When developing a project we will carefully review the site plan to ensure the best layout for traffic entering and exiting the site. Traffic volume generated by medical practices is significantly higher more than your typical office building. A single large orthopedic practice generates hundreds of patients each weekday.

The high volume of visitors also puts a big demand on parking. In addition to providing an abundance of free parking for patients and medical staff, we've set up free valet parking services to assist patients that are unable to navigate large parking structures. We've found that an amenity like this goes a long way to improving the patient's experience and maintaining the satisfaction of our medical tenants. Other amenities we provide include full service cafeterias, on-site pharmacies and free shuttle service to the nearby subway and/or bus stops.

Medical space developers also have to be conscious of the hard facts that come with tremendous visitor traffic. The owner has to be conscious of increased wear and tear on common areas and bathrooms. And from a design and structural view, the developer needs to increase the number of high-speed elevators in any given building.

Building medical space requires special knowledge and skills such as how to build lead- lined X-ray rooms, reinforce floors for heavy X-ray equipment and meet the strict building requirements of health department officials. At our property at 2510 Westchester Avenue in the Bronx, we converted a former Verizon call center into a state-of-the-art medical complex. One of our major tenants--a urology practice -- required the installation of an advanced linear accelerator which is used to treat prostate cancer. Customized medical space such as this requires a developer with many years of experience in the healthcare field.

Another key to success is building a medical community within the complex that will attract other physicians. Physicians want to be in an office environment where they can get referrals as well as make referrals themselves. They also want to have easy access to services such as radiology and physical therapy. Building a successful medical facility is as much about building a community as it is about the structure � including the location, amenities, services and facilities that enable practices to grow.

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Joseph Deglomini, Jr., is principal of Simone Development, which invests in office, medical, retail and industrial real estate throughout the five boroughs of New York. Simone Development has more than 1 million square feet of medical space in its portfolio and serves over 40 different medical tenants.

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