Health care, reconciliation bills have mixed construction impacts
On Thursday [March 25], Congress completed action on a reconciliation bill that modifies the newly enacted health care legislation and also replaces private lending for college student loans with direct lending from the U.S. Department of Education. President Obama was expected to sign the bill on Tuesday [March 29].
The reconciliation bill eliminates the discriminatory definition of small construction employer, defining all small employers as firms with 50 or fewer full-time equivalent employees.
"Health-care real estate players unanimously agreed that the new law would sooner or later result in increased demand for both on- and off-campus outpatient medical office buildings (MOBs)," according to a Data DIGest report that quotes the "In the Pipeline" online newsletter.
"Other potential impacts mentioned by health-care property professionals include the following: The bill places limits on new or expanded physician-owned hospitals, a major source of health care development in some parts of the country, including the fast-growing Texas market....Charitable hospitals face more verification and accountability for the 'community benefit' they provide in exchange for their tax-exempt status, possibly translating into demand for off-campus facilities. Nearly 60 million square feet of new medical office supply could eventually be built to meet the demand, based on a standard industry multiplier of 1.9 square feet of new MOB space for each new outpatient brought into the system," said Jeffrey Cooper, executive managing director, Savills LLC, New York, in the report.