Medical Office Market Adapts to Changing Healthcare Trends
The Columbia, SC medical office market continued to change throughout the second half of 2012 as healthcare practices are being shaped to better serve patients’ needs and respond to rapidly changing healthcare delivery systems. Some medical practices are focusing their attention on suburban submarkets allowing patients easier access to facilities closer to neighborhoods. Other practices continue to locate within medical office buildings on hospital campuses providing convenience for patients requiring several physicians and treatment types. Patients’ hospital stays are being shortened in length and when appropriate inpatient procedures are being conducted in outpatient settings. A flight to quality trend exists in the medical office market as practices seek to upgrade facilities and increase efficiency.
The overall medical office market ended 2012 with a very low vacancy rate of 6.37%, a slight increase of 51 basis points from mid-year 2012, but an improvement from year-end 2011 when the vacancy rate was 11.91%. The average asking rental rate for the market remained steady throughout 2012. These statistics are inclusive of freestanding medical buildings as well as multi-tenant medical office buildings.
Recent quarters have brought limited change to the central business district which ended 2012 with virtually no space available and a vacancy rate of 1.73%, the lowest vacancy rate in the market, decreasing 17 basis points from mid-year 2012. New medical development has been occurring in suburban submarkets rather than in the CBD. The suburban vacancy rate at year-end 2012 was 7.23%, 64 basis points higher than mid-year 2012 but 4.88 percentage points lower than a year ago.
Construction continues on the $99-million expansion of Palmetto Health Baptist Parkridge in Northwest Columbia, a 224,590 square foot hospital to accommodate 76 hospital beds. The new campus, including an 80,000 square foot Ambulatory Services Building, is expected to be complete in December 2013.
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