BROOKFIELD, WI-Health care construction jumped almost 50% to $12.6 billion in 2010, up from $8.5 billion in 2009. Many medical development experts are now saying that the industry has come back almost full force from before the recession.
Rich Galling, president and COO with the locally based Hammes Co., says his firm completed projects valued at about $1.3 billion in 2010, though some of those developments started a few years ago. “Most of the big health care systems put their capital projects on hold during the financial crisis,” Galling tells GlobeSt.com.
However, the past 16 months has brought a resurgence in projects, he says. “In 2009 there wasn’t much new building construction coming out of the ground, but the market thawed late in that year,” Galling says. “We definitely saw a pick-up in 2010.”
His firm completed a number of large projects in 2010, including the 800,000-square-foot Aurora Medical Center in Summit, WI in March, a 340,000-square-foot Saint Joseph hospital in Kentucky in August and the 223,414-square-foot St. Luke’s Hospital at the Vintage in Houston in December.
He says the strength of the asset has been the fundamentals of its existence; basically, the growing population, but in size and in age. Also, consolidations have hit the industry hard, with successful mergers usually bringing on redevelopment or expansion plans.
Other changes include more spending on information technology at hospitals taking away from construction costs, systems being dedicated to green initiatives and an increase in development of ambulatory satellites and medical office buildings. “The biggest change we’ve seen is how systems are definitely scrutinizing projects much, much tighter, being incredibly precise to make sure things are underwritten,” he says.
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