Rendering of the new Banner University Medical Center building expected to open in 2019.
Here we go Tucson! AND It’s about time.
More commercial Real Estate sectors in Tucson are gaining traction! Multifamily led the way and it still is the busiest commercial sector in Tucson because of the high return on investment in the sector.
Here’s more good news for Tucson and the Nation.
In Tucson, Banner Health Company merged with the University of Arizona Health Network in 2015, acquiring their two hospitals and all of their clinics. In addition to an expansion of the hospital, Banner is now set to build a new, nine story 670,000 SF tower that will open in 2019, and a new outpatient clinic facility on Campbell and Allen. This is the type of major development we have been waiting for in Tucson for a long time! No doubt the future of this industry is moving in the right direction and now is the time to invest in these properties.
This activity is also taking affect In Phoenix, the first medical building in nearly a decade is being built by Los Angeles based firm Legend Real Estate management. It is to be called Arrowhead Orchards in Glendale and will be over 100,000 SF and top of the line in every way!
Since 2010 there have been a shortage of medical office properties available with limited or no growth in the industry. Since the recession, new construction on these types of buildings has basically been basically nonexistent. This has left the country with a scarcity of medical facilities, but an increase in demand for healthcare due to the affordable care act.
National medical groups have been buying out smaller and underperforming companies and putting them under their management. These national groups are now contributing significant amounts of private capital into acquiring new property. This includes acquiring and remodeling old hospital space that may have not been usable before but is now active in the market.
Many physicians and practices are now actually finding out that they prefer opening smaller clinics in a medical suite compared to a conventional hospital campus. Developers have actually even started the practice of converting previous vacant retail spaces at shopping centers into medical office.
Now, there is no shortage of demand for these types of properties and as a result developers have finally started to build medical office properties once again. Nationwide, more than eighty-six billion dollars have been invested into the construction of medical properties since Q1 2016. Most of these projects are expansions or medical office developments that have become increasingly popular as an alternative to larger hospitals. This shift is also due to healthcare providers trying to change their management and administration style in an effort to lower costs.