{"id":1004465359,"date":"2020-07-28T19:28:08","date_gmt":"2020-07-29T03:28:08","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004465359"},"modified":"2022-03-03T08:07:17","modified_gmt":"2022-03-03T16:07:17","slug":"hilco-on-expected-shifts-in-health-care-settings","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/","title":{"rendered":"Hilco on Expected Shifts in Health-Care Settings"},"content":{"rendered":"
\"\"<\/a>

(Left to right) John Satter, Senior Managing Director, and Adam Zimmerman, Vice President, Hilco Global. Image courtesy of Hilco Global<\/em><\/p><\/div>\n

COVID-19 continues to be a test for the health-care real estate sector, with several patient care settings closing temporarily, while others have been undergoing reconfigurations. At the same time, according to a recent report by Hilco Global<\/a>, the current crisis has also brought the problem of shutdown or antiquated traditional hospitals to the forefront, especially in smaller markets. Amid the uncertainty that the health-care sector is facing, experts agree that in the post-pandemic world, the hospital landscape may not be the same, as patients are expected to continue to avoid crowded locations.  <\/p>\n

Managing Director John Satter and Vice President Adam Zimmerman discuss the future use of health-care facilities, particularly the shuttered ones, so they can continue to be of interest to investors and serve the community.  <\/p>\n

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READ ALSO<\/strong>: How COVID-19 Is Shaping Health-Care Real Estate: JLL<\/a><\/p>\n

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What have been the most impactful changes in patient-care settings since the pandemic started.<\/strong><\/p>\n

Satter and Zimmerman<\/strong>: The most impactful changes in patient care settings will evolve based on government involvement in health-care delivery. The large hospital facilities are not well-suited to handle the pandemic, with limited quarantine areas to meet the demand of patients. The profitable segments of the business model were halted, due to a lack of resources. It is apparent that design flexibility needs to be incorporated in campus facilities to allow for profitable business segments to continue, while providing resources to serve pandemic-afflicted patients.<\/p>\n

When it comes to traditional hospitals, satellite care facilities, hospitals at home and telehealth medicine, what should we expect to see more of in the post-pandemic world?<\/strong><\/p>\n

Satter and Zimmerman<\/strong>: The growth in patients covered by government-funded Medicaid and Medicare will drive lower-cost initiatives in telemedicine, retail clinics and satellite-care facilities. We believe that the need for traditional medical office space for health-care professionals will decline.<\/p>\n

\"\"<\/a><\/p>\n

The current crisis has highlighted the issue of antiquated and shuttered medical facilities. What does this mean for the broader health care real estate market moving forward?<\/strong><\/p>\n

Satter and Zimmerman<\/strong>: The shuttered and antiquated medical facilities are generally located in low-income urban neighborhoods or rural markets that present challenges for adaptive reuse, due to limited demand and the high cost of conversion. These markets have generally been under-resourced and overwhelmed during the outbreak. The need for suitable quarantine space available to the state or local government during an outbreak may provide funding that helps redevelopment clear a financial hurdle.<\/p>\n

What new purposes can be found for these underutilized facilities? Can you tell us about an adaptive-reuse project that Hilco recently assessed?<\/strong><\/p>\n

Satter and Zimmerman<\/strong>: Large medical campuses have successfully been converted to a medical office, psychiatric care facility, mixed-use facility or multiunit housing development. Hilco provided valuation services for private equity group of the former Phoenix Memorial Hospital Campus that was repurposed to medical office and behavioral center.<\/p>\n

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READ ALSO<\/strong>: What’s Trending in Health-Care Design?<\/a><\/p>\n

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What can you tell us about investor sentiment during these difficult times? What type of health-care facilities do you expect to be in higher demand in the future?<\/strong><\/p>\n

Satter and Zimmerman<\/strong>: Investors are generally in a wait-and-see mode, closely watching corporate messaging to understand financial health and credit risk. We expect investor demand to remain strong for single-tenant leased assets occupied by credit-rated tenants.<\/p>\n

What will upcoming quarters look like for health-care real estate?<\/strong><\/p>\n

Satter and Zimmerman<\/strong>: It is difficult to predict, but a renewed focus on the creditworthiness of tenants and operators is underway. A significant area of focus is on cap rates and the direction they are heading. Current market thinking is that equity return requirements will increase, thereby raising near-term cap rates. This is somewhat offset by lower interest rates to qualified borrowers in the near term.<\/p>\n

What are Hilco\u2019s goals for the rest of the year?<\/strong><\/p>\n

Satter and Zimmerman<\/strong>: Our valuation team is focused on our core competency of understanding market value and trends, including where we are in the market cycle and assisting stakeholders\u2014health-care owners and investors\u2014with maximizing their assets\u2019 market position.<\/p>\n","protected":false},"excerpt":{"rendered":"

Managing Director John Satter and Vice President Adam Zimmerman discuss which facilities are expected to be more in demand in the post-pandemic world, as well as the issue of shuttered hospitals. <\/p>\n","protected":false},"author":30,"featured_media":1004465689,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21754,23891,21742,21744],"tags":[40476,48950,39082],"class_list":["post-1004465359","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-medical-office","category-national","category-latest","category-people","tag-cpetalks","tag-coronavirus","tag-hilco-global"],"acf":[],"yoast_head":"\nHilco on Expected Shifts in Health-Care Settings - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hilco on Expected Shifts in Health-Care Settings\" \/>\n<meta property=\"og:description\" content=\"Managing Director John Satter and Vice President Adam Zimmerman discuss which facilities are expected to be more in demand in the post-pandemic world, as well as the issue of shuttered hospitals.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-29T03:28:08+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-03-03T16:07:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/07\/John-Satter-Managing-Director-and-Adam-Zimmerman-Vice-President-Hilco-Global.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Roxana Baiceanu\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/\",\"name\":\"Hilco on Expected Shifts in Health-Care Settings - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/07\/John-Satter-Managing-Director-and-Adam-Zimmerman-Vice-President-Hilco-Global.jpg\",\"datePublished\":\"2020-07-29T03:28:08+00:00\",\"dateModified\":\"2022-03-03T16:07:17+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/b9dffbe4e6d3437c6ee209677f7462f2\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/hilco-on-expected-shifts-in-health-care-settings\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/07\/John-Satter-Managing-Director-and-Adam-Zimmerman-Vice-President-Hilco-Global.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/07\/John-Satter-Managing-Director-and-Adam-Zimmerman-Vice-President-Hilco-Global.jpg\",\"width\":800,\"height\":620,\"caption\":\"John Satter, Managing Director, and Adam Zimmerman, Vice President, Hilco Global. 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