Hospitals Attract Private Practices.

The Columbia, South Carolina medical market experienced a moderate increase in occupancy during the first half of 2010, with a mid-year vacancy rate of 11.38%. This 1.98% decline in vacancy from year-end 2009 can largely be attributed to a trend of hospitals acquiring private medical practices across the region. On-campus medical office buildings (MOBs) experienced 48,242 square feet of positive absorption during the six month period ending June 30, 2010. Off-campus multi- and single-tenant properties experienced a combined negative absorption of 17,073 square feet during this same period, which resulted in a net positive absorption of 18,388 during the first two quarters of 2010.

Prior to the recent recession, medical practices were constructing privately owned facilities away from hospital campuses in order to take advantage of historically low interest rates and favorable financing terms. As the economy weakened and uncertainty regarding healthcare reform dominated the business side of private practices, physicians started looking at alternative business models. These eroding conditions, combined with hospital systems’ desire to affiliate with some of the region’s leading practices, substantiates the aforementioned trend reversal.

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