November 6, 2019
When it comes to the healthcare industry, the word “healthy” almost exclusively applies to people. For Mitchell Yankowitz, managing partner at Medical Asset Management, “healthy” is a word he also uses to describe medical office buildings (MOBs). His firm is currently developing Tarzana Medical Atrium, a class A MOB adjacent to Providence Cedars-Sinai Tarzana Medical Center, which is located in Tarzana, CA. When it opens in January 2020, the three-story, 90,000-square-foot building will be the first new structure built on the campus in 25 years. Connect Healthcare sat down with Yankowitz to explore the importance of a thriving tenant ecosystem and how it contributes to a healthy MOB.
CONNECT HEALTHCARE: What is a tenant ecosystem in a medical office environment? Is it similar to a tenant mix in a retail setting?
YANKOWITZ: A tenant ecosystem consists of all the tenants in the building and how they work together to create a place where all tenants are successful. In the case of an MOB, it relates to the type of medical services that are provided and how they interrelate from the patient’s point of view.
CONNECT HEALTHCARE: Can you provide an example of a healthy tenant ecosystem versus an unhealthy one?
YANKOWITZ: It really comes down to patient satisfaction, convenience and ease of access. An example of a healthy tenant ecosystem is one where a tenant who is a primary care physician can refer patients to specialists in the same building, much like a cardiologist or an allergist. An unhealthy ecosystem is one where tenants compete against one another. An entire building full of gynecologists, for instance, would be a great example of an unhealthy tenant ecosystem. If you had a gynecologist in a building along with a pediatrician, that would be the basis of a healthy ecosystem. Similarly, you wouldn’t want a building with multiple dentists because they would be competing for patients. Instead, you need to create a dental ecosystem with a dentist, an endodontist (a dentist that specializes in a tooth’s soft tissue) and an oral surgeon.
CONNECT HEALTHCARE: Are there any tenants, beyond medical or healthcare, that contribute to a healthy medical office building?
YANKOWITZ: That is a great question. My colleagues and I ask ourselves this very question when we are talking to potential tenants. Since healthcare has become more consumer driven and patient-consumers seek convenience, there is a push to bring in tenants that make things easier and convenient. For example, adding a pharmacy to the tenant ecosystem so patients can pick up their prescriptions before they leave the building, or a clinical laboratory so patients can get their scans and bloodwork on-site, instead of being forced to go to another medical office building or even worse, a hospital.
CONNECT HEALTHCARE: Speaking of hospitals, do they play a role in a medical office building’s tenant ecosystem?
YANKOWITZ: It really depends on how close the MOB is to a medical campus, and whether the physicians need easy access to the hospitals. Certain physicians, usually specialists, need to be close to the hospital so they have access to patients in the hospital and can easily bounce back to see patients in their office. Increasingly, health systems are leasing space in medical office buildings, both on-campus and off-campus, and they use the space in a variety of ways, from multi-specialty practices to urgent care clinics.
CONNECT HEALTHCARE: What can you tell us about your tenant ecosystem strategy for Tarzana Medical Atrium?
YANKOWITZ: Providence Tarzana Medical Center signed a 10-year lease for one-third of the space, which will no doubt be valuable for their staff. The Centre for Neuro Skills also signed a 10-year lease for 24,500 square feet. The brain injury rehabilitation provider is relocating its clinical facility, currently in Encino, CA, to our building, where it will have ample room for its staff of about 55 to see up to 66 patients daily. Additionally, the building is designed to accommodate an ambulatory surgery center or a dialysis center. We’ve also included a pharmacy.
[Pictured above: Tarzana Medical Atrium, which will be completed in early 2020]
CONNECT HEALTHCARE: How does a healthy tenant ecosystem boost performance and profitability for both building owners and tenants?
YANKOWITZ: It’s a win-win for both owners and tenants when the ecosystem is healthy. Owners only make money when tenants can pay their rent. The healthier their business is, the more patients they see and the more referrals they receive, which can only be a good thing for everyone’s success overall.
CONNECT HEALTHCARE: What are the key considerations for arranging tenants in MOBs?
YANKOWITZ: Certain tenants need to be or prefer to be on the ground floor—such as a surgery center, which needs easy access to the facilities. Parking is an important consideration for most practices, regardless of specialty, but particularly for those with older patients or patients who struggle with mobility issues from pain or other problems. To accommodate specific patients and make it more convenient for them to see their providers, Tarzana Medical Atrium will offer a 420-space adjacent parking structure with valet assist.
For questions, comments or concerns, please contact Jennifer Duell Popovec