Columbia Medical Office Market Report – New Hospital; Changing Healthcare
August 9, 2014
COLUMBIA, SC
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KEY TAKEAWAYS
- The Columbia, SC medical office market ended the first half of 2014 with a vacancy rate of 9.28%.
- Overall asking rental rates averaged $20.89 per square foot per year full service at mid-year 2014.
- Northeast Columbia had the highest vacancy rate in the market at 16.74%. North Columbia had the lowest vacancy rate at 4.07%.
- Palmetto Health Baptist Parkridge opened in the second quarter of 2014.
- Limited leasing activity in the medical office market.
- South Carolina health systems create partnership.
CURRENT CONDITIONS
Columbia, South Carolina’s newest hospital, Palmetto Health Baptist Parkridge, opened 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 walkway to a new 80,000 square foot medical office building, which is in its final stages of construction. 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. Parkridge shares a campus with an existing Parkridge Medical Office Building providing patients easy access to more physicians.
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.
The certificate of need program, which was vetoed by Governor Nikki Haley last year, has since been upheld by the S.C. Supreme Court. The program gives the S.C. Department of Health and Environmental Control authority to approve plans of hospitals and nursing homes to add beds or build new additions. Funds are being reallocated and the program will continue to review applications, reversing the effects of the veto, which had placed pending applications on hold preventing new construction.
IN THE MONTHS AHEAD
The vacancy rate is anticipated to remain stable through the remainder of 2014. Changing healthcare policies will motivate more health systems to affiliate with one another as well as with physician practices. Cost effectiveness and quality healthcare will drive the market. Limited construction is anticipated for the remainder of the year.
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