The Phoenix Healthcare Summit brought together industry leaders to discuss the future of healthcare real estate, with a strong focus on how the sector is evolving to meet modern patient needs. The discussions highlighted two key trends reshaping the landscape: the rise of ambulatory care and the importance of collaborative, tech-driven development strategies.
Here’s a closer look at the summit’s key insights and what they mean for the future of healthcare real estate in Phoenix.
Expanding Ambulatory Care & Medical Office Buildings (MOBs)
The shift from hospital-based care to outpatient facilities continues to accelerate, driven by cost-efficiency, convenience, and patient preference. In Phoenix, this trend is reshaping the healthcare real estate market in several impactful ways:
- Retail to Medical Conversions:
One of the most notable trends is the repurposing of underutilized retail spaces into healthcare facilities. These conversions allow providers to expand their footprint without the high costs of ground-up development. However, they come with challenges, including the need for detailed due diligence to assess structural integrity, zoning compliance, and infrastructure capacity (such as power, plumbing, and HVAC). - The Rise of Ambulatory Surgery Centers (ASCs):
As hospitals look to decentralize services and reduce operational costs, ambulatory surgery centers (ASCs) and urgent care clinics are becoming more prevalent. Industry experts project a 25% increase in ASC development over the next few years, reflecting strong demand for outpatient care. - Redevelopment Challenges:
While converting existing spaces is attractive, the cost and availability of suitable real estate remain significant barriers. Physicians buy-in and financing hurdles further complicate projects. Standardized design approaches are emerging as a solution, ensuring flexibility for future needs while controlling costs. - Retail & Hospitality Influence:
Healthcare providers are taking cues from the retail and hospitality sectors, creating more patient-friendly environments. Retail locations are being transformed into satellite clinics, allowing health systems to expand market presence while minimizing capital investment. - Strategic Market Expansion:
With Phoenix’s southeast and southwest valley’s experiencing significant population growth, healthcare providers are prioritizing land acquisition in these areas. Early site selection ensures facilities can meet long-term community needs. - Physician Participation & Financing:
Rising tenant improvement (TI) costs are prompting creative financing solutions, including joint ventures between healthcare providers and real estate developers. This approach supports physician-owned MOBs and ASCs while mitigating financial risk.
Collaboration Across the Project Lifecycle
The summit also highlighted how successful healthcare real estate projects depend on early collaboration among stakeholders – developers, designers, contractors, and healthcare providers.
- Early Stakeholder Engagement:
Projects that integrate all stakeholders from the outset are more likely to stay on track, both financially and operationally. Early engagement reduces redesign costs and ensures the final facility meets clinical and patient-care needs. - Flexibility & Standardization:
To future-proof healthcare spaces, developers are embracing modular, flexible designs. Facilities designed to accommodate multiple specialties and evolving healthcare technologies are better positioned for long-term success. - Data-Driven Decision Making:
Real-time data and patient flow analytics are increasingly informing healthcare facility design. These insights not only optimize space utilization but also strengthen the case for capital investments by demonstrating improved efficiency and patient outcomes. - Regulatory Considerations:
With 2026 CMS regulations on the horizon including changes related to AI, prior authorization, and behavioral health access developers must ensure projects align with evolving compliance requirements. - Technology Integration:
From telehealth capabilities to AI-driven patient monitoring and robotic-assisted procedures, healthcare facilities are being designed to support cutting-edge technologies that improve care delivery and operational efficiency. - Financing & Cost Control:
As construction costs continue to rise, stakeholders are exploring public-private partnerships, joint ventures, and alternative development structures to keep projects financially viable. - Sustainability & Wellness Design:
The design of healthcare facilities is increasingly focused on wellness principles, incorporating natural light, outdoor spaces, and energy-efficient systems. These elements not only enhance patient experience but also support staff well-being and reduce operational costs.
Key Takeaways for Healthcare Real Estate
The Phoenix Healthcare Summit made one thing clear: the future of healthcare real estate lies in ambulatory, flexible, and tech-integrated facilities. Here are the top takeaways:
- Ambulatory Care Boom: Outpatient facilities, including ASCs and MOBs, are expanding rapidly as providers seek cost-effective, patient-centric solutions.
- Retail Conversions on the Rise: Repurposing retail spaces for healthcare is gaining traction but requires careful planning and infrastructure upgrades.
- Collaboration is Critical: Early stakeholder engagement ensures projects are efficient, cost-effective, and aligned with healthcare providers’ goals.
- Regulatory & Economic Impacts: New CMS regulations and rising construction costs will shape future development strategies.
- Tech-Enabled Facilities: Telehealth, AI, and robotics are transforming healthcare delivery, making technology integration a top priority.
Partnering for Success in Healthcare Real Estate
As the healthcare landscape continues to evolve, success in real estate development hinges on strategic planning, innovative financing, and collaborative execution. The insights from the Phoenix Healthcare Summit underscore the importance of adaptive design, early stakeholder engagement, and staying ahead of regulatory changes.
At ICRE Investment Team, we understand the unique challenges and opportunities within healthcare real estate. Whether it’s navigating complex conversions, securing physician participation, or ensuring projects align with the latest CMS regulations, our team is equipped to guide healthcare providers and developers through every stage of the process.
If you’re looking to turn these trends into actionable opportunities, reach out to the ICRE Investment Team. Together, we can build the future of healthcare real estate – one innovative project at a time.
