With Local Law Firms’ Help, Healthcare Organizations Can Focus On Patients, Not Real Estate

For years, healthcare organizations of all sizes have prioritized the development of small retail healthcare facilities, like off-campus urgent care and emergency departments that are equipped with the tools to treat a wide variety of conditions in spaces much smaller than traditional hospitals.

Then came the coronavirus pandemic, which led to two major changes in healthcare: first, the increase in telemedicine, and second, a liquidity crunch caused by the cancellation of scores of elective procedures. These developments have, in many cases, strengthened the resolve of healthcare organizations seeking to rethink their use of space. By opening a multitude of smaller care facilities, these organizations can provide care to a larger network of communities while simultaneously reducing building footprints and cutting construction costs. 

It isn't just healthcare organizations that are interested in building more outpatient and remote facilities; consumers are ready for them too. Research shows that U.S. healthcare consumers have become more receptive to receiving care outside of a traditional doctor’s office or hospital setting since the pandemic began. Smaller facilities, which provide an alternative to such traditional settings, are also being equipped to treat more serious conditions than they have in the past, enabling them to care for a larger proportion of patients in the communities they serve.

Healthcare organizations seeking to transition to an array of smaller spaces will, of course, need to purchase real estate. In burgeoning urban areas like Seattle-Tacoma, acquiring real estate is an increasingly complicated endeavor. To simplify the real estate acquisition process, healthcare organizations can turn to a surprising ally: local legal counsel. 

Kurt Kruckeberg, a real estate attorney at Seattle-based law firm Hillis Clark Martin & Peterson, said regional and national healthcare organizations are increasingly enlisting the services of local law firms to handle their real estate transactions. 

“In the past, these organizations may have used one of a few large national firms to handle their real estate work,” Kruckeberg said. “While the big firms bring a lot to the table, a local or regional firm may have much to offer when it comes to an understanding the nitty-gritty issues specific to the Pacific Northwest market.”

Unlike some national firms, local firms often thrive on quirks and details. These firms tend to have a unique, in-depth understanding of the state- or city-specific regulations in their area, allowing them to find creative, elegant solutions to the myriad issues that can arise in the process of real estate development. Healthcare organizations can also benefit from a local firm’s established network of industry professionals, which can help ensure that projects are completed on time and within budget. 

“Whether it’s a major acquisition of another healthcare company or simply purchasing a smaller new site, due diligence is very important, because a lot of unexpected local issues can arise,” Kruckeberg said. “A local firm knows whether there are special permits you need or even local endangered species considerations that could affect development. We can help organizations navigate those issues while staying on deadline.” 

2020 marked the culmination of a years-long trend in which Kruckeberg said he has seen healthcare groups increasingly focus on smaller building footprints to achieve more efficiency. Large healthcare and medical office properties are going up for sale, and joint venture activity and leasebacks are both up as healthcare organizations look to deploy capital elsewhere.

Kruckeberg said he and his colleagues want to help healthcare organizations meet this growing demand by taking the diligence aspect of finding a new property off their plates. 

“We’re here to reinforce the basics: Let’s look at title, let’s look at zoning, let’s speak with surveyors who can show up on time and get things done on deadline,” he said. “In the end, these are details that can make or break a transaction, and local firms come prepared with the knowledge and relationships needed to handle them.” 

This article was produced in collaboration between Hillis Clark Martin & Peterson P.S. and Studio B. Bisnow news staff was not involved in the production of this content.

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