Acquisitions Create Stability.
The medical office market in Columbia, South Carolina, remained stable during 2010 even as a weakened economy and uncertainty regarding healthcare reform dominated the healthcare industry. The market experienced a 12-month decline in vacancy of 1.3% from year-end 2009 to year-end 2010, absorbing 26,243 square feet during this period.
As national healthcare reform and decreases to the State budget created concern that the structure of healthcare reimbursements would likely change in the future, hospital systems looked to affiliate with some of the area’s leading practices in order to broaden the scope of services provided within the region. These changing conditions within the healthcare industry also resulted in private practices exploring alternative business models to mitigate risk to their partners and physicians. The resulting trend that emerged was the acquisition of private practices by regional hospital systems.
The aforementioned acquisitions created stability within the medical office market as many single- and multi-tenant leases were extended to coincide with business agreements between physicians and hospital systems. Rental rates in both on-campus medical office buildings (MOBs) and off-campus multi-tenant buildings remained steadfast despite economic conditions occurring in the market.
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