Midwest Real Estate News October 2011 : Page 1

WOMEN IN REAL ESTATE DIRECTORY INSIDE! p. 33 midwest THE DAKOTAS | ILLINOIS | INDIANA | IOWA | KANSAS | KENTUCKY | MICHIGAN | MINNESOTA | MISSOURI | NEBRASKA | OHIO | TENNESSEE | WISCONSIN OCTOBER/NOVEMBER 2011 R E A L E S T A T E N E W S® WWW.REJOURNALS.COM Minnesota Page 22 VOLUME 27, ISSUE 6 DIRECTORIES: CONSTRUCTION, ASSET/PROPERTY MANAGEMENT FIRMS, GREEN BUILDING/PRODUCTS & SERVICES • PAGE 56 Recession-proof? Healthcare developers find that there’s no such thing. one of the steadiest, and strongest, sectors in the strug-gling commercial real estate industry. A changing market Brad Wilson, principal with Chicago-based Blue-stone Healthcare Partners, says that there is still activity in the healthcare sector of the commercial real estate business. But this activity is changing. Wilson points to the government. He says Oba-macare has created new forms of competition for med-ical providers. And this is changing the way that companies such as his do business. "Prior to the changes, you had a unique group of Community Memorial Medical Commons in Menomonee Falls, Wis. photo courtesy of Jay Westhauser/Westhauser Photography By Dan Rafter, Editor see doctors, still need to visit emergency rooms after those ill-advised ski trips. And with demand for medical services never drop-H ping, developers across the Midwest can turn to medical office buildings, hospitals and hospital-affiliated outpa-tient facilities to help fill the gaps in their business, right? Sort of. But even the healthcare sector of the com-mercial real estate industry has been slowed by the economy. Just ask John Marshall, vice president of healthcare strategy and development with Indianapolis-based Duke Realty. Not every medical procedure is created equal. And those that aren’t absolutely necessary? During the height of the economic downturn, a growing number of consumers put them off. “You will find, and every hospital will tell you the same thing, that elective procedures were limited dur-ing the worst days of the downturn,” Marshall said. “These procedures have ticked up a little bit now. When people have a choice, though, in whether to have a pro-ealthcare is the steadiest of all commercial real estate sectors, right? People, no matter how badly they are struggling financially, still need to cedure done, if it’s an elective matter they’re still less in-clined to proceed in today’s tough economic environ-ment. Of course, if it’s a legitimate health matter, they still need healthcare. It’s the number of elective proce-dures that has dropped.” Those developers who focus mostly on healthcare projects, then, have seen their business dip — not as dramatically as for those who specialized in retail or of-fice — during these rough times for the national econ-omy. Like other commercial developers, they’re doing their best now to steadily build their business back up. On the healthcare development front, at least, there’s good news. Marshall reports that activity has picked up across the board in this sector. Leasing is still down, with physicians less confident of their long-term status. They may or may not still be employed by hos-pitals in six months, depending on the fate of the na-tional economy. But the acquisition and development side of the business has picked up, and that’s at least some good news for a commercial real estate industry that’s still hoping for a more robust recovery. The healthcare sector of the commercial real estate industry, then, might no longer be considered reces-sion-proof. But it’s difficult to argue that it doesn’t remain healthcare providers: You had the small doctor groups. You had the larger specialty groups. Then you had the community hospitals and the large city teaching hospi-tals. Now, you see the infiltration of national healthcare corporations coming in to the Chicago market to com-HEALTHCARE (continued on page 14) company returns to Woolen

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