The annual BOMA International Medical Real Estate (MRE) conference returned to another year of packed content, stacked speakers and ample networking opportunities. The 2024 conference, taking place in Orlando, FL, brought together 1,400 attendees, 16 sessions and 55 speakers to provide the latest insights and trends for the medical real estate industry.
Below are a few of the key takeaways from the conference:
What are the most prominent issues in the medical healthcare real estate industry today?
Speakers addressed the bigger concerns currently in the medical real estate industry. Beginning with the first session of the day, the “Reverse Provider Panel: Ask Me Anything!” Ben Ochs, Chief Executive Officer & Managing Partner, Anchor Health Properties, found that one of the challenges of health systems is that they “rarely invest in capital,” and described the importance of fostering these conversations between property owners and tenants. Day one Opening Keynote Speaker Spencer Levy, Global Client Strategist, Senior Economic Advisor, CBRE, discussed these thoughts on a broader scale, depicting the influences of inflation on the medical real estate industry. “Wage growth will keep services inflation heightened...Since the pandemic, people are afraid to build, afraid to buy,” Levy said.
The day two Morning Keynote with Scott Becker, Publisher, Beckers Healthcare, Hospital Review and Partner, McGuireWoods LLP, outlined the key healthcare trends in 2024. “Telehealth investments have gone down due to drug abuse. Once a $17-billion-dollar industry is now $500 million,” he says. “There remains a constant battle between trying to find solutions to cut costs, such as bringing medical solutions to homes, while also balancing the efficiency that hospitals bring."
Echoing these challenges that Becker brought to light, many speakers also described the importance of not only making use of the spaces available – but making them work for specific medical needs. For example, in the session, “Transformative Strategies for Leveraging Core and Non-Core Strategies,” Angie Weber, First Vice President, CBRE stated, "When considering the most important drivers for space, it is important to remember that office spaces that have not been occupied for over ten years is not necessarily going to work for medical practices. People don't realize that, that the access can be horrible, the parking location not ideal and that the elevators could be out of use."
Travis Ives, Executive Director/Healthcare Capital Markets, Cushman & Wakefield, moderator from the session, “Converting Existing Structures into Medical Facilities: A Strategic Overview,” agrees: “Some elevators are not properly sized for gurneys – or there aren’t simply enough elevators in the building period. On that same note, the building might not be equipped for the right parking access – such as 360-degree parking – which makes medical building accessibility so much easier.”
ESG was another major issue discussed during the MRE conference. Kate Davis, Managing Director, Senior Portfolio Mgr., Harrison Street mentioned during the session, “How ESG is Driving Capital Investments,” that “Some of our investors are simply not interested in implementing ESG practices. Their goals are much more short-term than long-term. It can be challenging to get them on board.”
How do speakers see the medical real estate industry improving in the future?
The forecasting and trends discussed during the MRE conference was not all doom and gloom. Speakers shared their thoughts on how the industry can improve. As Mark Burkemper, Senior Managing Director, Head of Transactions - North America, Harrison Street, emphasized during the “Reverse Provider Panel: Ask Me Anything!” session: "Thinking about how we can help each other in the next five to ten years will help us the most in the long-term."
Opening Keynote Speaker Spencer Levy believes that the essential to MOB resilience is “dependent on jobs.” “You have to look locally rather than federally to find the laws that matter,” Levy says, as he stated during his presentation that “The key for real estate is to go to the markets where people live." Day two keynote speaker Scott Becker reaffirmed this notion that adding more medical staff is a priority to the industry. Becker shared the statistic that there are only one million doctors in the U.S. out of a 340-million-person population.
While the telehealth industry declined over the years, Becker believes adding back lower-credentialed staff can help assist with several issues, namely suicide prevention. As suicide remains a leading cause of death for many young people, Becker encouraged behavioral health industries to increase the number of professionals assisting these crisis calls.
Other trends speakers see within medical facilities are design changes within office spaces. For example, Speaker John Fard, System Director Real Estate, Commonspirit Health stated that “Co-locating and sharing spaces is the most important to us as we take into consideration square footage.” Co-locating and sharing spaces is already a buzzworthy trend as featured in reports like the 2024 JLL Global Occupancy Planning Benchmarking analysis.
Office space design is not the only component of adaptability in the medical real estate industry. Medical facility conversion projects are on the rise, as found in the “Converting Existing Structures into Medical Facilities: A Strategic Overview” session. Participants in the session were asked to complete a poll and the results found that “81% of the attendees present have been involved in a medical conversion project, 91% consider it to be a success and 100% expect to be involved in the projects moving forward." These stats from our conference alone signify the advancement of medical conversion projects. Scott Brinker, President and Chief Executive Officer, Healthpeak Properties confirmed this in the “Direct from the C-Suite: Navigating Healthcare Real Estate in the New Normal” session: "We're seeing a lot of demand for outpatient buildings. It's cheaper for the patient and a more profitable space."
What are the lasting words of encouragement speakers provided to attendees?
The conference speakers provided a lot of information – the challenges and expectations for the trends we expect to see in the medical real estate industry – but also some guidance for attendees’ overcoming adversity in the field. Below are a few key takeaways that made an impression:
- Start the conversation. The topic of keeping a consistent dialogue going between property owners and tenants was a significant theme in the conference. As covered in the “Direct from the C-Suite" session, Mike Conn, Chief Executive Officer, Meridian says, "When it comes to getting over hurdles, it comes down to the trust in your business partnerships, specifically your trust with leasing owners."
- Utilize your talent. On the topic of converting existing buildings into medical facilities, Andrew Haslam, Division Chief Real Estate Officer, described the importance of thinking strategically before jumping into creating a building from scratch: “You have to put money back in the aging and existing facilities. We used to have a boiler in one of our buildings like the olden days. I have to credit our medical facilities staff for being innovative in finding parts.”
- Embrace the challenges. Our Keynote Lunch: A Conversation with Drew Brees: Faith, Family, Football and Philanthropy, highlighted some important wisdom from Drew Brees, Former Super Bowl MVP-Winning Quarterback of the New Orleans Saints. "All of my success came from not getting what I wanted,” Brees’ says. “Adversity is opportunity. In every situation, you are either learning, teaching or growing."