While the news may hold doom and gloom tales for the healthcare industry, healthcare real estate development has been strong in recent years. The industry is experiencing an uptick in the development of a wide variety of healthcare properties, including rehabilitation hospitals and medical office buildings. Jackson seems to be keeping with that trend with a new rehabilitation hospital set to open this summer, two new clinics and the expansion of an ambulatory surgery center all in the works.
Medical office construction trends reflect the cyclical impact of the recession as well as significant changes occurring within the healthcare industry. The Affordable Care Act had a profound impact on healthcare delivery and preferences for and utilization of healthcare real estate. Modern, flexible medical office space is in high demand as rapid technological changes require providers to be agile in their space usage. Many older properties have become functionally obsolete and too costly to renovate or retrofit so many are choosing ground-up construction projects in areas near major hospitals as well as targeted population groups.
"The medical community is at a pivotal point. If, and when, hospitals, doctors, and administrators get a handle on the ever-changing medical industry, it is poised for expansion," said Gary Taylor of Gary Taylor Investments. "Affordable construction costs, low interest rates and an increase in medial demand equal growth in development. The City of Jackson will continue to experience growth from West Tennessee Healthcare, Le Bonheur Children's Hospital, and Tennova Health System. Jackson is the mecca of medicine for rural West Tennessee, with a population of about 400,000 people, covering 13 counties. The delivery of healthcare in this demographic will continue to change due to technology and a need for a more efficient delivery system."
Most new projects are being built specifically for the end user. As such, the trend is swinging in favor of the "Build to Suit," where the site is identified by the tenant, unlike medical offices of the past where developers have built speculative projects on the "best-suited" land often driven by attractive pricing. The current market will have new medical construction being built closer to residential areas and on roads with higher traffic counts and better visibility.
Thomsen Farms, an 80-acre commercial development in rapidly growing North Jackson, is zoned for commercial retail and medical offices. It is home to two medical clinics, the Dermatology Clinic of Jackson, which opened in April 2013 and Advanced Cardiovascular and Vein Center which broke ground on its 9,500-square foot, one-and-a-half story building last spring. The clinic will open in March 2017.
"With nearly triple the size of our old space we will have space to see more patients, add services as well as more providers," said Alex Alperovich, MD. "We purchased the land in August 2015, and then my wife, Sheri, spent eight months designing it. She incorporated things she had seen that she liked in other clinics, labs and hospitals as well as put her Florida style in it. Brasfield Construction headed the project that resulted in a building unique for this area and utilized brick, stone, copper, stainless steel and wood."
Shadow Creek West Rendering
When looking to relocate his clinic, Alperoivch, knew he wanted to be conveniently located to hospitals as well as where he lived. Thomsen Farm fit the bill. "It is convenient for people and easy to find," he said. "It is highly visible and is in an area where there is a lot happening. The boutique retail shops in the area also create traffic to the area."
Shadow Creek West is a 12.5-acre commercial office development project, located along the east side of US Hwy 45 By-Pass in Murray Guard Square. Taylor's company has a development program land buyers and tenants can utilize to design, build, and lease back quality projects, at an effective cost. "The centralized location of Shadow Creek West is one of the key elements, along with it being one of the last undeveloped areas along the east side of the Hwy. 45 By-Pass," said Taylor. "We are currently having conversations with several professional groups such as doctors, lawyers, healthcare service providers, accountants, and insurance companies who are planning to expand their office space."
West Tennessee Bone and Joint Clinic, PC and Physicians Surgery Center are partnering to expand the Surgery Center at 207 Stonebridge Boulevard. The 25,000 square-foot expansion will result in a dual-use facility which will allow the surgery center to expand its family waiting room and build additional privacy suites for patients in need of longer monitoring and more acute care. West Tennessee Bone and Joint Clinic - Stonebridge, which uses the surgery center for many outpatient procedures will add approximately 14,000 square feet to its Stonebridge clinic space to better serve patients.
What is happening in North Madison County correlates to the national trend of active and growing healthcare real estate construction. With many physicians choosing to locate in higher traffic, retail oriented real estate developments versus a hospital campus, North Jackson seems to offer just what they are looking for.