Southern Nevada is poised to experience a major surge in medical real estate development in the next few years, an expert at Colliers International said.
The surge will be driven by 79 million baby boomers headed into retirement and millions of Americans covered under President Barack Obama's health care plan, said Stacy Scheer, who specializes in medical real estate properties at Colliers.
She expects to see a wealth of new development and expansion in Southern Nevada's medical office market as the health care industry shifts toward patient-centered accountable care organizations, or ACOs. Small practices and sole practitioners are joining larger ACOs, and the need for skilled nursing and assisted-living facilities is rising, Scheer said.
This massive influx of patients will create demand for more doctors' offices, hospitals, outpatient clinics and long-term care facilities. About 60 million square feet of medical real estate will be developed nationwide.
Colliers formed a specialty group led by Scheer and Andrew Kilduff focusing solely on real estate needs of next-generation health care providers in a rapidly changing market.
There's also a growing trend toward building off the hospital campus as physician groups look for ways to expand while curbing costs, Scheer said.
"The basic premise is you're seeing a migration to off-campus locations and the reason is just higher costs to be in a full-blown hospital," she said. "They're not restricted in construction, and beyond the cost is patient accessibility and convenience. So you're seeing medical facilities like quick-care centers popping up in Walgreens, even Wal-Mart. They're migrating more towards the retail setting."
Las Vegas hospitals are responding to the expected medical boom by expanding facilities. MountainView Hospital has a $68 million expansion project under construction that will add a new emergency room and 12-bed intensive care unit, and St. Rose Dominican Hospital is planning a new five-story, 326-bed tower at its Siena campus.
The $1.5 billion, 150-acre Union Village medical and senior-living complex in Henderson is expected to break ground in 2013.
"Medical is on everybody's radar screen," Southern Nevada Medical Industry Coalition Chief Executive Doug Geinzer said. "Not just medical, but health and wellness. It's a cottage industry and we're already killing it with spa treatments on the Strip. The MGM (Grand) built stay-well suites, totally rehabilitated for wellness fanatics. They've got vitamin C-infused showerheads."
It's all part of the "medical tourism" industry emerging in Las Vegas, he said. The Las Vegas Convention and Visitors Authority hired a full-time employee to focus on medical tourism, and the newly formed Las Vegas Regional Economic Development Council put health care at No. 2 on its priority list.
Las Vegas has some of the best cosmetic surgery facilities in the country and does a great job of protecting patients' anonymity, Geinzer said. And it's relatively cheap to fly here and stay here.
Tom Weniger, business development manager for Crovetti Orthopaedics, said patients are coming from as far as Alaska and China to have surgery performed in Las Vegas. Hip and knee replacement surgery for the 45- to 65-year-old age group is expected to increase 17 times by 2030, he said.
"People are more active now. Exercise used to be a walk, then it was aerobics with Jane Fonda, and now it's gyms and fitness centers," Weniger said. "I know we have tremendous potential for growth."
Dr. Michael Crovetti has performed nearly 350 outpatient surgeries and his patients are usually up and walking the same day, Weniger said.
Scheer said downtown Las Vegas will see new medical development to meet the needs of 1,500 Zappos employees working at their new headquarters, employees of startup technology companies and a growing population of condominium residents.
Research firm Applied Analysis reported 8.3 million square feet of medical office space in the Las Vegas Valley with a vacancy rate of 24.5 percent as of the third quarter, slightly below the 27.6 percent overall office vacancy.
The vacancy rate has been trending downward as demand has outpaced new inventory, Applied Analysis principal Brian Gordon said. He showed 171,209 square feet of positive net absorption, or more space taken than vacated, year to date. Only 44,000 square feet of medical office is under construction.
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.