The Phoenix Open has been a great event, more Q & A on HEALTHCARE from Phoenix area local, Trisha Talbot, Director with Newmark Global Healthcare Services.

How would you characterize the Phoenix medical office building (MOB) market? What trends are driving activity?
Hospitals are becoming the large tenants in a lot of MOBs in the Phoenix area. They are buying physician practices and/or hiring physicians as employees. Obviously, hospitals are looking to place their physicians as close to their hospitals as possible. We have hospitals systems that are purchasing MOBs nearby their campuses and owning the property. Other hospital systems continue to lease.

Since hospitals are controlling the physicians, some have pursued build-to -suit clinics rather than retrofit outdated facilities that are no longer compliant with regulations for ADA and/or to receive Medicare reimbursements. We are just starting to see new MOBs appear on the market. Since we are just emerging from the recession and still cautiously optimistic about the Affordable Care Act, new MOB developments are smaller, yet more efficient with an emphasis on visibility, cost effective to operate, attractive and in close proximity to a hospital.

As for private practices, specialists are combining from smaller groups to larger groups to manage cost savings for their overhead. Therefore, these groups are occupying larger spaces in MOBs.

The overall trend is efficiency of space. While the implementation of electronic medical records has practices investing in technology, it reduces the need to store a large amount of patient paperwork. Healthcare organizations only want to pay for office space where they can generate revenue. Therefore, we see the trends of physicians in smaller offices, sharing offices and sometimes only cubes for note taking and paperwork, especially in medical offices where surgeons are seeing their patients for pre op consultations or post op follow-up care. Administrative and storage space is kept to a minimum.

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