Healthcare Facilities

Senior Housing Overview

Strong Long-Term Growth

• Range of property types with different levels of service
  • Independent living facilities offer limited services
  • Assisted living facilities offer personal care and support services
  • Continuing care retirement communities provide the full spectrum of senior housing options
• Residents are the primary source of payment

Senior housing facilities include independent living facilities (ILFs), assisted living facilities (ALFs) and continuing care retirement communities (CCRCs). Each of these caters to different segments of the elderly population. Services provided by operators or tenants in these facilities are primarily paid for by the residents directly or through private insurance and are less reliant on government reimbursement programs such as Medicaid and Medicare. Senior housing property types are further described below:

• Independent Living Facilities. ILFs are for seniors that no longer live at home but still want to be able to live their day-to-day lives with some independence. Oftentimes, people who chose to reside in these facilities are those who feel overwhelmed with tasks at home or want to be a part of a more social environment.
• Assisted Living Facilities. ALFs are licensed and regulated care facilities that provide personal care services, support and housing for those who need help with activities of daily living (ADL) yet typically require only limited medical care. Certain ALFs may offer higher levels of personal assistance for residents with Alzheimer’s disease or other forms of dementia.
• Continuing Care Retirement Communities. CCRCs provide housing and health-related services under long-term contracts. This alternative eliminates the need for relocating when health and medical needs change, thus allowing residents to “age in place.” Some CCRCs require a substantial entry or buy-in fee and most also charge monthly maintenance fees in exchange for a living unit, meals and some health services.

 

Medical Office Overview

• Office buildings containing physician’s offices and examination rooms
• Require more extensive plumbing, electrical and mechanical systems than typical office buildings

Medical Office Buildings (MOBs) typically contain physicians’ offices and examination rooms, and may also include pharmacies, hospital ancillary service space and outpatient services such as diagnostic centers, rehabilitation clinics and day-surgery operating rooms. While these facilities are similar to commercial office buildings, they require more systems to accommodate special requirements. MOBs are typically multi-tenant properties leased to multiple healthcare providers (hospitals and physician practices) although there is a trend towards net leases to doctors and hospitals.

 

Skilled Nursing Overview

• Licensed residential facilities that offer nursing and medical care
• Medicare and Medicaid programs are primary payers

Skilled nursing facilities (SNFs) offer nursing care for people not requiring the more extensive and sophisticated treatment available at hospitals. Sub-acute care services are provided to residents beyond room and board. Certain skilled nursing facilities provide some services on an out-patient basis. Skilled nursing services provided in these facilities are primarily paid for either by private sources or through the Medicare and Medicaid programs. SNFs are typically leased to single tenant operators under net lease structures.

 

Hospital Overview

• Specialized facilities providing a wide range of healthcare services
• Real estate intensive operating business

Hospitals fall into various property types:

• Acute Care Hospitals. Acute care hospitals offer a wide range of services such as fully-equipped operating and recovery rooms, emergency care, obstetrics, radiology, intensive care, open heart surgery and coronary care, neurosurgery, neonatal intensive care, magnetic resonance imaging, nursing units, oncology, clinical laboratories, respiratory therapy, physical therapy, nuclear medicine, rehabilitation services and outpatient services.
• Long-Term Acute Care Hospitals (LTACHs). LTACHs provide care for patients with complex medical conditions that require longer stays and more intensive care, monitoring or emergency back-up than that available in most skilled nursing-based programs.
• Specialty Hospitals. Specialty hospitals are licensed as acute care hospitals but focus on providing care in specific areas such as cardiac, orthopedic and women’s conditions, or specific procedures such as surgery and are less likely to provide emergency services.
• Rehabilitation Hospitals. Rehabilitation hospitals provide inpatient and outpatient care for patients who have sustained traumatic injuries or illnesses, such as spinal cord injuries, strokes, head injuries, orthopedic problems, work-related disabilities and neurological diseases.

Services provided in such facilities are paid for by private sources, third-party payers (e.g., insurance and Health Maintenance Organizations (HMOs)), or through the Medicare and Medicaid programs. Hospitals are typically leased to single tenants under net lease structures.