Changing Healthcare to Drive Columbia Medical Real Estate Demand

Colliers International,South Carolina YE-2014 Columbia Medical Market Report

KEY TAKEAWAYS

• The Columbia, SC healthcare market ended 2014 with a vacancy rate of 7.82%.
• Overall asking rental rates averaged $21.06 per square foot per year full service at year-end 2014 for the market.
• Palmetto Health Baptist Parkridge, Columbia’s newest hospital, opened in March 2014.
• Aging population and more widely available insurance will drive demand for health care.

 

To download the complete report click the link: YE:2014 Columbia Medical Market Report.

 

 

CURRENT CONDITIONS

Changes in health care policy and an aging population are expected to drive demand for health care services.  According to ESRI demographics, in 2014, 13% of the population in the Columbia, SC MSA was over the age of 65.  The number is projected to grow, increasing the demand for medical services throughout the area.  Additionally, recent changes in healthcare policy make insurance available to individuals who were previously uninsured.  Medicaid and CHIP enrollment in South Carolina was up 11.4% in 2014 over the previous year, with an addition of 90,381 individuals becoming insured.  Continuing Medicaid expansion will contribute to the growing demand for healthcare and healthcare providers.

At year-end 2014, the vacancy rate for the Columbia, SC medical office market was down to 7.82% from 8.55% at mid-year 2014 and 8.74% at year-end 2013.  Activity was limited given the high occupancy in the market.  Asking rental rates averaged $21.06 per square foot per year full service at year-end 2014, up from $20.78 at mid-year 2014 and $20.80 at year-end 2013.  The highest asking rental rates are in the CBD averaging $23.20 per square foot per year full service.

Columbia welcomed its newest hospital, Palmetto Health Baptist Parkridge, in March 2014.  The 224,590 square foot hospital offers 24/7 emergency care, inpatient care, intensive care unit, labor and delivery, and a newborn nursery.  The $125 million hospital is connected by a walkway to a new approximately 80,000 square foot medical office building.  The hospital strives to make patients and their guests feel comfortable while providing a high quality level of care in a state of the art facility.  Palmetto Health Healing Waters, a spa and cosmetic clinic, recently opened at Parkridge.  The 6,931 square foot facility offers services ranging from facials to massages and is open to patients and the public.  Parkridge shares a campus with an existing Parkridge Medical Office Building providing patients easy access to more physicians.

Urgent care facilities are gaining popularity, specifically in the suburbs, as evidenced by the growing number of Doctors Care and MEDcare clinics, among others.  Moore Center for Orthopedics recently opened its first orthopedic urgent care facility, Moore Convenient Care, adjacent to Providence Hospital in the Northeast Columbia submarket.

Lexington Medical Park Otarre Pointe opened to patients in West Columbia.  The clinic offers primary care, occupational health, and occupational and physical therapy services.  The 70,000 square foot two-story building is located near Saxe Gotha Industrial Park, which is home to SCANA, Amazon and Nephron Pharmaceuticals.

With healthcare reform changing the way the medical industry operates, health systems are looking for ways to cut costs without affecting their high quality level of care.  Palmetto Health has joined forces with four South Carolina health systems and created The Initiant Health Collaborative.  The members include Greenville Health System (Greenville, SC), McLeod Health (Florence, SC), MUSC Health (Charleston, SC), Palmetto Health (Columbia, SC), and Self Regional Healthcare (Greenwood, SC).  The health systems remain independent, but joining forces allows them to jointly purchase equipment, supplies, and services, and share administrative and clinical support systems.

Sumter-based Tuomey Healthcare System is negotiating a merger with Palmetto Health.

 

 

IN THE MONTHS AHEAD

The vacancy rate is expected to remain low with moderate activity in 2015.  Sales activity is expected to increase.  Hospital affiliations are likely to continue as cost effectiveness and quality healthcare drive the market.  An aging population and greater access to health insurance will create a greater demand for healthcare.

 

FOR MORE STATEWIDE COMMERCIAL REAL ESTATE NEWS CHECK OUT OUR MARKET REPORTS HERE.

 

To download the complete report click the link: YE:2014 Columbia Medical Market Report.