Hospitals Team Up with Developers to Expand

Many market segments have plunged over the last few years, but the hospital construction and renovation market has continued to thrive. After posting a 17% gain in 2002, the health-care market could experience a 2.9% increase this year, according to Dodge, a provider of construction information. With the aging of the baby boomer generation and the greater need for health-care, hospitals are now looking for ways to expand. Rather than funding the expansion, however, some hospitals are now teaming up with developers to pay for construction costs. In this arrangement, the developers pay for the construction of the new building, and the hospitals sign a long-term lease. The partnership allows the hospitals to provide new products and services to their clients without tying up cash in the construction of new surgery centers, medical office buildings, or wellness centers.