As many sectors of the real estate market face challenges, a recent study from JLL is showing how those within the healthcare sphere can better utilize real estate to impact patient experience as well as overall performance.
The study, “2023 Patient Consumer Survey,” surveyed nearly 5,000 patients across various markets in the United States. However, JLL experts also noted how these ideas have more specifically impacted Greater Los Angeles and Orange County.
“Data-informed site selection is more important than ever for healthcare providers. For infill markets like LA and OC, providers need to have both an understanding of the healthcare and population demographic trends affecting their patients, coupled with insights into the availability of the real estate in competitive submarkets,” Chris Isola, executive vice president for JLL, said.
The survey found that 78 percent of people surveyed continue to seek in-person treatment for various types of healthcare despite a newer trend in telehealth options. However, 64 percent of respondents still had telehealth appointments.
The main reasons for telehealth visits, according to the report, were for behavioral health visits and follow-up appointments from in-person visits. Primary and preventative care made up just 17 percent of telehealth visits. While telehealth for all healthcare services has overall declined since the start of the pandemic to 10 percent of all visits, telehealth still makes up more than 57 percent of psychiatry visits.
“Telehealth is not replacing the need for in-person care. Rather it’s expanding the reach for providers, and serving as an intermediate step for pre-appointment screenings and/or follow-up check-ins. From a real estate perspective, expanding a provider’s ambulatory network may address some of the access issues which have driven consumers to seek care telephonically,” Isola said.
The report also showed that in-person visits are much more likely in situations where it is convenient for the patient, which means location of clinics and medical offices are crucial to high performance. Because of this, the survey found that healthcare clinics in retail strip centers are becoming a popular option as they are within close proximity of various other amenities. The top additional location visited on a healthcare trip was a pharmacy, which received visits from 32 percent of all respondents.
“We are seeing a continuation of the retailization of healthcare in Southern California. Here, we were late to develop this product type. However, we are catching up with the rest of the country with great retail type options. We expect this to continue as community based providers are the new normal now,” JLL Managing Director Bryan Lewitt said.
This will likely be a continued trend as even medical office space is seeing more vacancy rates, according to another recent report from JLL. Overall, Los Angeles is home to approximately 25.7 million square feet of medical office space and 10.2 percent of that was vacant during the first quarter of 2023. Net absorption was also recorded at negative 109,899 square feet during this time.
However, the medical office market remains strong compared to the larger office market. As of the first quarter of the year, vacancy in Greater Los Angeles has increased to 24.1 percent, with 5.89 million square feet of sublease vacancy.
