HSA Commercial profiles a broker at our firm each month as part of our HSA News & Views blog. In this edition, we talk with Bob Titzer, executive vice president with Corporate Real Estate Services and HSA|PrimeCare. In his role with PrimeCare, Bob is responsible for developing the leasing strategy and for the oversight of leasing activities for the HSA|PrimeCare portfolio, which includes 800,000 square feet of healthcare properties across the country.
HSA: Obviously, there have been a lot of changes recently in healthcare, what do you think has been the major difference as it pertains to real estate?
Titzer: Because of the precarious status of the federal healthcare policy, most of the leasing and development activity right now is institutional or hospital driven. Take for example, the University of Chicago Cancer Center at Silver Cross Hospital, a 22,500-square-foot oncology facility that HSA|PrimeCare is developing in New Lenox, Illinois. Both of these healthcare institutions had the wisdom and foresight to plan this cancer center project years before the market demanded it, and they were able to then recruit the doctors to work in their new joint practice once the development plan was underway. Most hospitals have managed to stay ahead of the curve in terms of demographic changes, updating their facilities, expanding service offerings, and anticipating the effects of new regulations.
HSA: How have the physician groups adapted to these policy and market changes?
Titzer: By and large, the physician practices have reacted by becoming much more risk averse. Physician practices are increasingly wary of the prospect of shrinking reimbursements, regulatory complexity, and mandatory investments in new, expensive technologies for patient care and records management. That’s why so many physicians are selling their practices to hospital systems, because it presents the opportunity to offload their administrative and managerial responsibilities, which are becoming an increasingly cumbersome constraint on the time spent with their patients. However, with the future of the healthcare reform law now under review by the Supreme Court, the physicians appear to be in a holding pattern.
HSA: What’s the overall impact on healthcare real estate leasing?
Titzer: As the independent medical practices are reluctant to make any immediate changes, leasing in multi-tenant medical office buildings with smaller suites is rather slow. That’s why most leasing and development will continue to be driven by larger hospitals in the expansion of services into new markets and the acquisition of doctors’ groups.
Bob Titzer’s thorough understanding of the transaction process includes a strong background in construction, financial analysis, and lease negotiation in addition to experience in markets across the country as well as the Chicago metropolitan area. Bob’s work has earned repeat business with clients such as The University of Chicago, Ingalls Health System, Central DuPage Hospital, McCormick Theological Seminary, Advocate Healthcare, Silver Cross Hospital, and Fitness Formula Clubs. He has significant experience in working as an advisor to various businesses including a concentration in work for healthcare and not-for-profit organizations.