Most hospitals and health systems, regardless of size, are planning to increase their investments in ambulatory surgery centers (ASCs). ASCs have become the model for providing high-quality, low-cost surgical care, and many hospitals are converting their outpatient departments
As landlords and tenants continue to navigate the uncertainties of traditional office and retail properties in the era of COVID, one asset type that has emerged as more resilient in this new environment is life science real estate.[1] The spaces utilized by biotech and pharmaceutical companies, as well as medical research facilities, are highly technical, with site-specific functionality that cannot be replicated by remote work environments. As a result, life science real estate continues to attract tenants and property owners continue to invest in this sector. However, utilization of space for life science uses—wet and dry laboratories, warm rooms and cold rooms, and other activities—presents a number of specific issues for both tenants and landlords that should be considered in any lease transaction. Below is a summary of some of those issues from both a tenant’s and a landlord’s perspective.
Continue Reading Issues in Life Science Leases
How do you take a negative and turn it into a positive? COVID-19 has made answering this question very difficult, as the pandemic continues to have a negative and in some cases long lasting and devastating impact on people’s daily lives and the many businesses that help sustain daily living. One area of business that has been hit particularly hard, as a result of the pandemic, has been the hospitality industry. According to a new national report completed by Trepp [1], the hotel industry is facing an unprecedented number of foreclosures as the COVID-19 pandemic continues to devastate small business hotel owners and its workforce. More specifically, American Hotel & Lodging Association (AHLA) conducted a survey of more than 600 hotel owner respondents and more than half of them stated that they are in danger of losing their property to foreclosure by commercial real estate lenders due to COVID-19.[2] As a result of these market conditions, some senior living developers and operators see a growing opportunity to capitalize on the hotel foreclosures by converting them to assisted living facilities.[3] However, turning this negative into a positive won’t go without its challenges, and developers and owners should be mindful of some pitfalls when attempting to make this conversion a reality in Texas.
Continue Reading Hotel Conversions to Assisted Living in the Wake of COVID-19
Introduction
This article examines the different types of preferential rights in ground leases for medical office buildings, and examines strategies in drafting preferential rights provisions to protect the interests of both ground lessors and ground lessees. Ground leases are a popular way for hospitals and health systems (collectively, “Hospitals“) to maintain ownership and control of their hospital campus, while also allowing them expand their campuses or monetize equity tied up in Hospital-owned buildings. Typically, a ground lessee (or, the “MOB Owner“) is either a developer of, or investor in, medical office buildings (“MOBs“) who either develops the MOB or acquires an existing MOB from the Hospital and then subleases space within the MOB to physicians, physician groups or the Hospital itself. Under a ground lease, typically the MOB Owner holds a leasehold interest in the real property and owns fee title to the building and other improvements located thereon for the term of the ground lease, and upon the expiration of the ground lease, title to the improvements reverts to the Hospital.
Continue Reading Exploring Preferential Rights in Hospital Ground Leases
The past few years have seen an unprecedented number of bankruptcies in the healthcare space, primarily from hospitals and senior living operators. The pressure placed on healthcare operating companies will only increase as they deal with the effects of the COVID-19 pandemic and continued downward pressure on reimbursements. As the owner of the real estate
The healthcare real estate industry finds itself in unchartered waters while grappling with the myriad issues created by the COVID-19 pandemic. Landlords are flooded with requests from tenants for rent relief as healthcare providers are facing unprecedented financial pressure during the COVID-19 crisis.
Continue Reading WEBINAR – A Look at Some Legal Implications of COVID-19 on Healthcare Real Estate
Conventional wisdom has held that the healthcare real estate industry is generally recession resistant. While that has historically been the case, the conventional wisdom did not account for a recession caused solely by a public health crisis due to a global pandemic. While the long-term effects of the COVID-19 pandemic on the healthcare real estate market remain to be seen, the short-term effects of the pandemic are already being felt throughout the industry.
Continue Reading A Look at Some Legal Implications of COVID-19 on Healthcare Real Estate
The retailization of healthcare has been a hot topic recently in healthcare and real estate industry circles alike. But what does this term really mean? From a healthcare perspective, it describes the evolution of the delivery of healthcare from a physician-centric model to a more consumer friendly, patient-centric model – much the way retail goods