2019 Continues with Flurry of Hospital Deliveries
While MOB transaction activity might have cooled somewhat and MOB construction remains steady, deliveries of hospital projects have been on a spike. Based on projects that have either opened or are scheduled to open by the end of the year, we will be adding roughly 35 million square feet to inventory in 2019. This is up from around 24 million added in 2018. These projects span across the country and although they come in all sizes, the volume is due in part to a number of behemoth projects finally coming to fruition. Eleven projects opening this year comprise of half a million square feet or more (!). That’s 22% of what’s opening in just those projects. A perfect example is the new Stanford Hospital which is in final preparations for opening in October. The project cost $2 billion, makes up 824,000 square feet and meets California’s new seismic safety requirements. Construction began in the spring of 2013.
Of the 297 projects opening this year, 74 are brand new or replacement hospitals. Roughly 30 of those are micro hospitals, but the rest range in size with an average of 261,000 square feet. The lion’s share continues to be expansion projects on existing hospitals – roughly 63% of the square feet being delivered. These projects vary but many hospitals are adding patient towers with all private rooms, expanding their emergency rooms and adding/expanding surgical suites. Stay tuned to keep on top of these trends and more!