INDIANAPOLIS-Since its founding in 1985, Indianapolis-based Cornerstone Cos. Inc. has been a regional developer of outpatient healthcare facilities. It has typically started up to three projects annually. The company, however, is growing, albeit slowly, and could open six new buildings in 2013. As it looks to expand to new markets, it could also develop its first building in the southeast.

While the company's strategy has been to build and hold its facilities, it does, on occasion, sell buildings. The company recently took advantage of a strong seller's market by selling a package of five medical buildings, three of its own and two from other owners, for more than $30 million.

Healthcare Real Estate Insights recently interviewed Cornerstone's executive vice president of development J. Taggart “Tag” Birge about the firm's prospects moving forward and the healthcare real estate sector in general.

Here's the second part of the interview. Click here for Part One.

HREI: Over the years, has Cornerstone sold many of its buildings?

Birge: No, we really haven't, as it's not our model. Traditionally, we've been a company that builds, manages, leases and holds onto our facilities for a long time.

HREI: So why did you sell this portfolio?

Birge: There are times when, ifwe have a critical mass and the market is right, we will look at selling some of our properties. In looking long term, I would say that our current plan is to do another one of these sales perhaps 10 years down the road. It's (currently) a seller's market because I think there is still more capital out there than product available, and because the hospitals had taken their feet off the pedal when it came to building and monetizing assets in recent years.

HREI: With more and more health systems employing doctors than in the past, when many were independent physicians looking for space in buildings such as yours, will there be many multi-tenant buildings moving forward?

Birge: That's a good question. In all parts of the country, the health systems are owning a larger and larger share of the physicians, making them the dominant player … in terms of driving the MOB needs. A lot of our tenants started out as private physicians and ended up being acquired (by health systems), which only enhanced the value of our buildings as our tenants went from being local physicians to investment grade credit.

HREI: When talking about the increasing number of physicians being employed, do you still foresee chances for firms like yours to own the buildings that you develop?

Birge: Because we typically develop off-campus MOBs rather than on-campus buildings, we're finding that health systems are comfortable having off-campus buildings being owned by third-party developers.

HREI: Have you always done more off-campus than on-campus?

Birge: We have. I'd say a quarter of our portfolio is on-campus, with the rest being in off-campus locations.

John B. Mugford is the Editor of Healthcare Real Estate Insights, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.