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Managing medical buildings.

An ambulance races to the entrance of an office building and squeals to a stop. Three members of an emergency response team pile out, dash through the building's entrance, and hurriedly load a stretcher into the elevator, watched over by the manager of the building. She has been alerted to this medical emergency by one of her long-time tenants, a physician whose patient has just suffered a massive coronary while undergoing a stress test.

An emergency such as this is any property manager's nightmare, and while it is a relatively rare occurrence, it is perhaps more likely to occur at a medical office building, where tenants might include physicians, dentists, other health professionals, as well as medical laboratories, and retail services such as optical shops, pharmacies, and drugstores.

"In a life-or-death situation like this, every second counts," says Len Dzielski, vice president of 111 N. Wabash Corp., which owns the Garland Building, a large medical office building in downtown Chicago. "That's when property managers have to know what they're doing and how to cope."

The manager of the Garland Building is Lucy Sliepka, who says, "In an emergency, you have to drop whatever you're doing and respond immediately."

Naarah Turpen, CPM|R^, of Denver's InSite Properties Inc., agrees, "When you manage a medical office building, everything is very immediate," she says. "Some of the people who come here might get sick in the elevator. This has to be cleaned immediately."

More traffic, more maintenance

In addition to emergency situations, the demands placed on maintenance staff are often amplified by an extraordinary level of foot traffic. In a building with 60 medical tenants, for example, each doctor might see as many as 40 patients a day. Add to this a two- to three-person staff per physician, and the result is over 2,500 people who use the building per day.

"We provide day-time maintenance and a day porter," says Turpen, "so we can keep the building presentable and repair the inevitable bumps and dings that result from this kind of traffic."

Housekeeping requirements are more intense too, because doctors' offices tend to be divided into small examining and treatment rooms, which means more sinks, toilets, counter-tops, and vinyl floors to clean and disinfect.

While some buildings use a janitorial service, others prefer to hire and train their own cleaning staff. "This lets us assign the same person to the same clinic on a routine basis," says Richard Hein, vice president of The Graham Group, Inc., in Des Moines, Iowa. It gives us better control.

Hours, HVAC, and more

To accommodate the office hours of their professional tenants, many medical buildings are open from 6 a.m. to 10 p.m. weekdays, and Saturdays as well. If the building houses a walk-in clinic, that could mean a seven-day-a-week cleaning schedule.

Also key to tenant well-being are heat and air conditioning (HVAC). "This is especially important to physicians," explains Marilyn Kangas of Murdoch, Coll, and Lillibridge, which manages the Pittsfield Building in Chicago's Loop, where 60 percent of the tenants are medical professionals. "Many of their patients have to disrobe to undergo examinations and medical procedures, so they're more sensitive to cool air. We keep the building warmer in the winter and not so cool in the summer."

At the same time, the doctor's waiting room may be crowded with patients and need more air conditioning than the examining rooms. All this necessitates individually controlled heat and air conditioning.

Additional physical demands are placed on medical office buildings, for example floors that may need to be reinforced to accommodate heavy equipment such as magnetic resonance imaging systems (MRIs), x-ray film, and medical records. Because of the possibility of power failures, buildings that house ambulatory surgical suites or dialysis units may need auxiliary power units.

Safe and sound

"Security is important, too, especially at night," says Barbara Holland, CPM, with H & L Realty and Management Co., Las Vegas. On-site pharmacies and many doctors' offices store narcotics, which makes them a target for break-ins. Holland recommends a roving security guard who can make periodic checks of the premises.

Vigilant staff members can also prevent many security problems, says the Garland Building's Lucy Sliepka. "Our night-time security people know the tenants and most of the regular patients. They can spot people who don't belong, question them, and if necessary, escort them out of the building."

Medical office buildings located on a hospital campus may need to offer 24-hour access. In some cases, for example, physicians who are summoned to the hospital for consultation or to perform emergency procedures may decide to stop by their office. An obstetrician, for instance, may opt to catch up on office work while waiting to deliver a baby. The building's security system must be able to accommodate this type of tenant schedule.

The building's doors should be equipped with an alarm that sounds if someone enters or tries to prop open a door when it is in a secure mode. In buildings with electronic surveillance, closed-circuit TV monitors must be checked by security staff members.

Some buildings offer after-hours access via a system that combines a key-card or a number code plus a voice-activated process. To gain access, tenants must enter a pre-authorized code or swipe their I.D. card on a panel located next to the building's entrance.

If the property is equipped with a voice-recognition computer system, it monitors identity even further. "If the voice modulation doesn't match, the person can't get in," says Hein, "which means somebody can't pass on a code or an access card to someone else."

Another advantage of such a system is that when a tenant moves out or an employee is released, the person's entry authorization can be deleted from the system with just a few strokes on the property's computer.

Comings and goings

Access by patients and visitors is also important. Some medical office buildings offer valet parking to accommodate people with disabilities and also to ease parking hassles. For visitors who choose to park their own cars, sufficient space should be allocated to comply with local codes governing handicapped parking.

Sidewalks should feature curb-cuts and gently sloping elevations to accommodate wheelchairs. Electronically controlled doors can offer access to patients, visitors, and tenants who use wheelchairs, walkers, canes, and crutches. At least one of the building's elevators should be sized to accommodate a gurney cart and equipped with a key override for emergencies.

Elevators and phones should conform to the Americans with Disabilities Act (ADA) for people who are visually or hearing impaired.

Many medical buildings staff a patient and visitor information desk where an attendant can answer inquiries and provide assistance. "Some visitors may have vision limitations," says Richard Hein, "and others may be distraught by concerns over their health. They appreciate the extra assistance that an information desk can provide."

Rates, renewals and referrals

Stringent security and extra housekeeping can increase the building's operating expenses as much as 10 percent, and this higher overhead is usually passed on to tenants. "Our rental rates average $4 per square foot higher per year than non-medical properties," says Turpen.


Several things must be kept in mind in setting rents for medical offices, says Holland. "There's no reason why you can't make a decent profit if you factor in added costs for water, sewer, gas, electric, security, rubbish collection, and janitorial services."

However, retaining tenants is rarely a problem, says Turpen, as long as the building is well maintained. "Turnover is very low, and it's not unusual for doctors to be here for 15 years."

One reason for longer leases is because of build-out costs. Depending on the market, these can range from $35 to $80 per square foot, far above the $10 to $30 per square foot average in other commercial office buildings.

Location is paramount for many medical care professionals, especially for primary care physicians such as pediatricians and family practitioners whose patients often live nearby. "Doctors who choose to move to a new location can expect to lose a certain percent of their patients for every mile their patients must travel to the new location," says Turpen, "and that's an incentive to physicians to stay."

Physicians also like being in the same building with their colleagues, says Sliepka. The building she manages contains a pharmacy and a laboratory that does blood work and MRIs. "We're like a mini-hospital here, and general practitioners like to refer their patients to specialists in the building. Patients appreciate the one-stop convenience, too."

Negotiating lease rates and build-outs with medical tenants can be problematic, say property managers, because of doctors' time constraints. Many property managers wind up dealing with a doctor's office manager or accountant, or even the physician's attorney.

Service with a smile

One aspect of managing a medical office building on which property managers agree is the need for superior service. "You have to be a perfectionist," says Sliepka. "Every detail of managing a medical building is important."

When a lamp needs to be replaced or a spill needs to be cleaned up, says Kangas, it requires an immediate response. "Doctors need it taken care of now--or as they say--stat."

Turpen considers respect for a doctor's time one of the most important aspects of managing a medical building. "You must be very patient. They may be dealing with life-or-death situations, and you can't snap back at them. They expect you to provide the best office environment, and that means outstanding service."

Dealing with Medical Waste

On-the-job exposure to disease from medical waste is a risk faced not just by medical support workers but by janitorial staff in medical office buildings.

To prevent transmission of viruses such as hepatitis-B and the virus that causes AIDS, the law requires that offices that generate medical waste must arrange for disposal by a firm that specializes in biohazardous medical waste. Unless the lease stipulates to the contrary, the management of medical office buildings is not responsible for disposal.

The Occupational Safety and Health Administration (OSHA) requires that all blood and body fluids should be considered infectious, and all precautions should be taken to avoid direct contact with them. The biohazard label must appear on containers of used needles, syringes, and dressings as well as blood and body fluids.

Labels must be fluorescent orange or orange red, and employers must provide protective gloves and other clothing to employees who might come in contact with medical waste, along with training to help them protect themselves. Employers must replace hand protection whenever necessary and must offer vaccination against hepatitis-B to all employees who may come in contact with medical waste.

While tenants are responsible for disposal of medical waste, there is always a chance it could get into the doctor's regular waste by mistake. "There's also the possibility that an outsider could dump infected waste into a refuse can in a building's restrooms, such as a used syringe discarded by an IV-drug user," says Robert Krall, branch manager of Crawford & Company Risk Control Services/The FPE Group in Schaumburg, Ill., just outside Chicago.

"Housekeeping workers have to be careful not to dig their hands down inside a waste container because they don't know what they might encounter. Property managers and building owners are responsible for helping maintenance personnel protect themselves against this kind of thing."

Krall recommends that property managers offer instruction for employees in infection control procedures. "We offer a basic course," says Krall, "that's designed specifically to show housekeeping and maintenance personnel what precautions are appropriate based on their level of exposure." The hour-long training session uses visual aids to explain federal requirements for infection control and to demonstrate how to respond if an exposure to medical waste should take place. "Training should be designed to show workers how to protect themselves," says Krall, "not to scare them."

Office buildings with even a few medical offices should have a training and protection program, Krall contends. "It's the law, and it's also smart because it builds confidence and competence among employees that they can handle any exposure situation that might arise." Housekeeping personnel should be told that if they find medical waste intermixed with office trash, they should notify their immediate supervisor so the tenant can take responsibility for disposal.

Marilyn Kangas of Murdoch, Coll, & Lillibridge is currently negotiating with a medical waste hauling specialist on behalf of her medical tenants. "We're hoping to arrange for their medical waste to be stored in a secure area of the building where the hauler would pick it up weekly," she says. The service would be offered as a convenience to doctors, many of whom do not generate individually enough medical waste to justify weekly pick-up.

Naarah Turpen of InSite Properties Inc. in Denver keeps every medical tenant's waste removal plan on file. "We didn't want our janitorial company to have to do this, and we didn't want to assume any liability for it on behalf of the owner. It's just too important these days, and you have to be really careful."

Cathie Rategan is a freelance writer who frequently writes on real estate subjects.
COPYRIGHT 1994 National Association of Realtors
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Copyright 1994 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related article
Author:Rategan, Cathie
Publication:Journal of Property Management
Date:May 1, 1994
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