Illinois Real Estate Journal February 2014 : Page 1

VOL.16 NO.7 ©2014 LAW BULLETIN PUBLISHING CO. FEBRUARY 2014 How The ‘ACA’ Is Affecting Health Care Real Estate Strategy By Jon Boley, senior vice president of acquisitions and development, HSA PrimeCare Big City Job Numbers Will Shoulder Apartment Demand In Chicago C By Brian Wasag hicago’s designation as one of Google’s seven national tech hubs will attract new start-ups to the city, amplifying its already strong employment prospects, which is good news for Chicago’s multifamily market, according to an apartment research market report by Marcus & Millichap Real Estate Investment Services. Google is also expanding its workforce in the River North area, and will open an office in the West Loop during 2016. This rising em-ployment momentum, particularly with tech firms will boost Class A apartment occupancy, according to Marcus & Millichap. Steven Fifield, chairman and CEO of Fifield Companies, said many of the newer Class A luxury apartment buildings are attracting such white collar workers and college gradu-ates with discerning tastes. “We’re renting to a well-educated, fairly highly compensated renter and they have very high expecta-tions,” he said. “It’s not enough just to put washers and dryers in every unit and do granite countertops in the kitchens. Now we’ve moved on and put granite or quartz counter-tops in the bathrooms. “We’re kind of serving a different niche, maybe a slightly higher in-come niche, people who want the convenience of being able to walk to River North for the clubs or to walk to work,” he added. Still, with a wave of luxury units coming online downtown, where rents can top $3,000 per month, risks will remain, according to Mar-cus & Millichap. Lee Kiser, principal of Kiser Group, said he believes there is simply too much supply today in the trendiest neighborhoods near and in downtown Chicago. Kiser said there are 5,000 units in the construction pipeline that are sup-posed to be delivered this year in the Loop and the core urban market of Chicago. “All of the units coming online, as well as the buildings that have come online during the past three to four years, are all in that luxury rental Many health care service providers have spent the past few years attempting to understand and antic-ipate the vast changes resulting from the imple-mentation of the Afford-able Care Act (ACA) given the size and com-plexity of the law. Natu-rally, at HSA PrimeCare, we were particularly in-trigued by the law’s potential effect on the real estate component of health care providers’ ambulatory care strategies as a result of the potential influx of newly insured patient populations and the shift from fee-for-service to outcome-based payments. In order to gain a greater sense of perspective, we reached out to our clients in C-Suite positions at the leading health care institutions across the Midwest to conduct a HEALTHCARE FEATURE (continued on page 6) MULTI-FAMILY FEATURE (continued on page 6) PRSRT STD U.S. Postage PAID TWIN CITIES, MN PERMIT NO. 31515

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