WE MAKE YOUR HEALTHCARE REAL ESTATE WORK FOR YOU UNLOCKING VALUE THROUGH HEALTHCARE REAL ESTATE ANALYTICS

Transcription

1 WE MAKE YOUR HEALTHCARE REAL ESTATE WORK FOR YOU UNLOCKING VALUE THROUGH HEALTHCARE REAL ESTATE ANALYTICS

2 Healthcare Real Estate Analytics Table of Contents 1. Integrative Platform 2. Current Portfolio Review 3. Demographic Insights 4. Competitive Landscape 5. How Does RTG Add Value? About Realty Trust Group Since our inception in 1998, Realty Trust Group has become one of the most experienced and knowledgeable real estate advisory firms in the healthcare industry. With offices in Knoxville, Tennessee and Atlanta, Georgia, we have completed projects for clients in 27 states serving hospitals, health systems, physician groups and other owners, users and investors of healthcare real estate. Our philosophy is to provide innovative solutions to the complex and challenging issues found in today s healthcare real estate market. These solutions include strategic campus and facility planning, portfolio optimization, portfolio monetization, project development, site analysis and acquisition, asset management, fair market value opinions and many other ideas and services. Copyright Statement RTG RESOURCE 0816-A. Copyright 2016, Realty Trust Group. All rights reserved. No part of this document may be distributed, reproduced or posted without express written permission of Realty Trust Group, other than the following uses: You may copy this document and its contents for personal use only. You may distribute quotes or content from this document to third parties in news articles, blogs, forums or educational resources provided you acknowledge Realty Trust Group as the source of the material. If distributed online or electronically you must provide a working hyperlink to: Writers and Contributors Jake Hannay, Senior Analyst jhannay@realtytrustgroup.com Adam Luttrell, Senior Associate aluttrell@realtytrustgroup.com For More Information: Greg Gheen, President ggheen@realtytrustgroup.com One Cherokee Mills 2220 Sutherland Ave. Knoxville, TN Scott Evans, Executive Vice President sevans@realtytrustgroup.com 1100 Johnson Ferry Road Suite 400, Building 1 Atlanta, GA

3 Healthcare Real Estate Analytics by Jake Hannay The healthcare environment is rapidly changing across the country and health systems and providers are finding new and innovative ways to gain an advantage over their competition. RTG uses Portfolio and Market Analytics to assist our clients in developing real estate strategies that complement and enhance broader organizational strategies, reduce costs and increase revenue throughout their portfolio, and ensure that our clients healthcare real estate is working for them. MARKET DRIVEN DATA Current Portfolio Review STRATEGIC REAL ESTATE PLAN Define risks and opportunities Competitive Landscape Demographic Insights Determine how current assets align with demographic and market trends Capitalize on emerging / underserved markets and market penetration Through an integrative platform of services, RTG connects healthcare and real estate experience with market driven data to support a strategic real estate plan and informed decision making. RTG works to understand its clients strategies and growth initiatives to ensure that Real Estate Follows Strategy. Integrative Platform Developing an effective strategic real estate plan requires an integrative platform of services that analyzes market driven data to create a real estate strategy that supports our clients business strategy. As explained in more detail below, we analyze several aspects of our clients business and gather market data on large scales to create informed decisions and strategies. It is important to note that this process is not necessarily sequential. Rather, to develop a truly comprehensive real estate strategy, we look at the big picture and integrate client data and market data in-sync to understand the competitive landscape, define risks and opportunities, determine how our clients assets align with demographic and market trends, and capitalize on emerging / underserved markets. MARKET DRIVEN DATA Current Portfolio Review Demographic Insights Competitive Landscape 3

4 Current Portfolio Review To develop a meaningful real estate strategy, an organization must fully understand its current portfolio, which can be more difficult than it seems. Therefore, we typically start by completing a detailed comprehensive review and analysis of our clients real estate portfolio (both owned and leased) to identify potential risks and opportunities. Evaluating current real estate practices, building and portfolio utilization, control and financial performance reviews, and the medical service line mix of the portfolio will all help an organization assess its current state and be prepared to better plan for and react to market-driven information. Risks identified in this phase could be anything from potential regulatory compliance concerns to poor financial performance. Opportunities may range from consolidation options which reduce overhead to creating a sale / leaseback opportunity for a non-core asset to generate capital that can be invested back into health services with higher rates of return. RTG recently identified three consolidation opportunities for one of our clients resulting in net present value savings of approximately $1M by relocating non-revenue producing services to more cost effective space and repurposing the existing medical office space to its highest and best use. Demographic Insights In addition to understanding our clients portfolio, it is imperative to understand the markets and communities in which our clients serve. Understanding where patients live, typical driving patterns for residents and commuters, uncovering new and / or underserved markets, and studying demographic trends and projections is crucial in developing a long-term real estate strategy. RTG utilizes sophisticated mapping and geospatial analysis to convert market-driven data into tangible information that can be easily presented with visual presentations to help our clients understand the markets they serve to better make decisions for their organization and communities. For example, by understanding where our clients patients live and learning more about the demographics in their service area, we can help identify optimal locations for outpatient services to increase convenience and patient satisfaction by reducing commute times and locating services in communities where they are needed most. Shown Here: Drive time study for a subject location to determine the location s geographic reach within a desired drive time. The blue dots represent current patients home addresses to determine how many patients live within a desired drive time from the subject location. Takeaways / Insights: Subject location would effectively extend the provider s primary care presence into an underserved submarket within its primary service area, but wouldn t likely draw current patients living closer to the community core. 4

5 Competitive Landscape Over the past several years the industry has seen a shift in care from hospital campuses toward ambulatory facilities. The goal is to provide the highest quality of care in the most cost-effective setting possible. Outpatient facilities are not only more affordable to construct and operate, but they can also achieve process efficiencies that enable more procedures to be done in a given time period than could be achieved in a hospital setting. Additionally, hospitals are shifting their focus on ambulatory strategies and access points in preparation for population health management. This has increased competition in the medical real estate market as providers are locating their facilities closer to where patients live and / or work to provide convenient care and to increase the number of entry points into the health system to protect and gain market share. RTG understands these trends and their impact on our clients strategies. We use this information in addition to identifying where our clients competitors are located, what service lines they provide, and how their referral patterns likely work. Through a collaborative analysis, RTG can help predict competitors ambulatory growth strategies to help our clients identify both offensive and defensive opportunities to gain and / or retain market share. As a result of a recent ambulatory strategic planning engagement, RTG identified a growth opportunity in a highly-competitive submarket. Through detailed site analysis and selection, along with service line planning efforts, the client has increased market share by 5% in that county within two years of opening the new facility. How Does RTG Add Value? RTG brings healthcare and real estate experience together to formulate a comprehensive strategic real estate plan to define risks and opportunities, determine how to align assets with demographic and market trends, and help clients capitalize on emerging / underserved markets. The healthcare environment is continuously changing and the corresponding real estate implications can be challenging and taxing for a health system, hospital, or physician group to manage appropriately and timely. It is through RTG s integrative approach and understanding of our clients portfolio, ability to gather and analyze data on a large scale, and understanding of the competitive landscape our clients compete in that RTG creates significant value in developing comprehensive real estate strategies that follow and support our clients business strategies. 5