Health

Developers join forces to create rehabilitation and psychiatric hospitals

Real estate developers Hicks Ventures and Artemis Real Estate Partners have signed a $100 million joint venture agreement to build about 20 inpatient rehabilitation and mental health hospitals, the companies announced Thursday.

More real estate developers and investment firms are focusing on the aftercare and outpatient sector as the population ages, interest rates remain low, reimbursement trends change and technology advances. Houston-based Hicks Ventures also has a post-accident unit with an inpatient dialysis unit under development.

“As the post-acute and behavioral therapy markets continue to expand rapidly, this joint venture with Artemis Real Estate Partners will enable us to build 18-20 hospitals or approximately $400 million worth of projects to add to our portfolio,” Larry Weil, Director. health care and head of Hicks Ventures, the press release said.

According to a recent report, there has been a significant increase in third-party healthcare real estate development projects, which account for 42% of current projects. analysis from consulting firm H2C Securities. Construction costs are up about 18% year-over-year, according to H2C experts, and third-party developers can generally build more efficiently than healthcare systems.

“Strong demand and a supply bottleneck (for medical office buildings) have heightened investor appetite for alternative healthcare real estate assets,” H2C writes in its report. September Report. “Currently, additional post-acute care assets such as inpatient rehabilitation hospitals, behavioral health hospitals and others are being considered, with an abundance of dry powder capital awaiting market deployment.”

In March, Hicks Ventures will break ground for a 53,000-square-foot, 42-bed postoperative facility with an inpatient dialysis unit in Wasau, Wisconsin. Last year, the firm sold three fully leased inpatient rehabilitation hospitals to Medical Properties Trust and MedProperties for $86.8 million.

Over the past 20 years, Hicks Ventures has completed over $1 billion in healthcare development projects, including six acute care hospitals, seven inpatient rehabilitation hospitals, eight long-term care hospitals, and nine medical office buildings.


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