Health systems eye real estate moves in post-pandemic world – Axios

November 15, 2022

Illustration: Annelise Capossela/Axios
Health systems facing economic headwinds and the aftereffects of the pandemic are taking a closer look at divesting or squeezing more value out of their real estate holdings.
Why it matters: Real estate can account for up to 40% of a health system's balance sheet and also represent a major chunk of some communities' commercial real estate inventory.
The big picture: Inflation is still driving up the costs of just about everything. With the threat of a recession, the bond markets are drying up and cash is tight.
State of play: Work-from-home policies and the continued use of virtual care are forcing a reckoning.
Yes, but: On the clinical side, there's closer to a 15% to 20% reduction in space for many health systems, Johnson said.
The intrigue: In my years of reporting on hospitals, nothing can get people more riled up than talking about parking. But the demand is actually still far below what it was pre-pandemic, Johnson said.
Be smart: It's clear the pandemic changed how a lot of health systems thought about how they wanted to use their space, said Lisa Goldstein, senior vice president at Kaufman Hall.
The bottom line: We often think of health systems as major employers in a community, or as providers of essential services.


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