Reports & Analysis

Sector Analysis

Healthy City: Inside New York City's Hospital Building Boom


An Evolving Marketplace Driving Investment Decisions


The Building Congress survey asked hospital administrators to rank the factors driving their future expansion plans.

The two most frequently-cited reasons for future construction projects were a need to improve aging facilities and to increase operating efficiencies.

"The big New York City institutions are competing with each other and other leading national hospitals, who are all making major improvements to their main facilities. In order to maintain their national leadership position, hospitals have to upgrade their main facilities — which typically include expansive inpatient programs. This is another trend you will see continuing for the next several years," said Crispino.

The survey also asked respondents to identify the service area of future construction projects, which appears to confirm this observation.

Most frequently cited was the addition or improvement of inpatient medical facilities, reflecting an industry-wide effort to modernize traditional core facilities, an equally important trend in healthcare construction, together with the creation of more primary and outpatient settings. While NYC Health + Hospitals accounted for seven of 17 reported inpatient medical projects, most hospitals also reported investments in inpatient facilities.

A good example of this is Montefiore Health System's plans to spend more than $50 million annually in five Bronx locations for inpatient services, in addition to continuing work to update the recently expanded Hutchinson Campus in the Bronx.

"Smaller community-based hospitals are forming more meaningful business partnerships with the largest flagship institutions, who are investing major resources to improve these aging facilities alongside their own outpatient and primary care investments," said Rich Steimel, Principal in Charge, Project Management and Construction for Lend Lease. "It's a very dynamic marketplace in all parts of the industry and all parts of the City."

While respondents indicated much of their upcoming construction activity will be to improve inpatient capacity, outpatient facilities still made up slightly more than one-third of all reported future investments. A number of large institutions reported that expanding product lines was a primary factor in their capital investment planning — which also could be related to their development of primary care services.

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