Tuesday, December 17, 2013

Mobile Healthcare App Trends

The Health IT space is strong and is growing at a tremendous rate. Georgia, for example, has more than 186 companies operating in the Health IT space, employing over 15,000 people and growing at an aggregated 40% rate (source: Technology Association of Georgia). 

In recognition of the strength of this sector, Modern Healthcare recently published an article highlighting the role mobile apps play in the healthcare space and sharing several important trends.

Highlights from the article follow.

What is the adoption rate?  According to a survey of more than 8,600 adults released in October 2013 by Manhattan Research:
  • About 95 million Americans used their mobile phones either as healthcare tools or to find health information – up 27% from 75 million in 2012.
  • Smartphones have become an “indispensible” source of healthcare information for many, with 38% of smartphone users saying their device was “essential” for finding health and medical information.
What Health IT App’s Do.  The IMS Institute for Healthcare Informatics recently completed a study of nearly 43,700 iTunes apps purported to be health or medical apps.  In a subsequent report, IMS reported:
  • Only 54% of the apps were “genuine” healthcare apps. And of those, 69% targeted consumers and patients while 31% were built for use by clinicians.
  • Most of the consumer healthcare apps were “simple in design and [did] little more than provide information.”
  • Only 159 of the consumer apps tracked or captured user-entered data
  • Fewer than 50 of the apps related to condition management or provided tools and calculators for users to measure their vitals
Which apps are used most?  In a 2013 Modern Healthcare survey seeking to identify the “Most Important Mobile Medical Applications,” respondents said they continue to rely on old standbys among apps, defined as downloadable software programs that are mobile device-specific.
  • In all, respondents identified 83 apps and devices performing 46 primary functions.  Many of the apps are specifically described in the article.
  • The most popular mobile medical app function in the survey was drug reference, followed by general medical reference and personal fitness. 
Prospects for Continued Growth.  A recent policy brief on mobile health by the Robert Wood Johnson Foundation, published in the journal Health Affairs, cited industry experts who predict:
  • The number of mobile health apps will increase by a rate of 25% a year for the foreseeable future.
  • Globally, 500 million consumers and healthcare providers will use a mobile health app within the next two years.
  • By 2018, “half of the 3.4 billion mobile device users worldwide will download a health app.”

Why is a real estate person tracking this information?  It's fairly simple.  Healthcare and technology organizations BOTH benefit when they work with a commercial agent who understands the factors impacting their business strategies.  Mobile health providers benefit from my team's ability to protect their specialized technology needs and through our clear understanding of the marketplace in which they operate.  And our healthcare provider clients benefit through our understanding of the role technology plays in today’s complex healthcare delivery environment.

I'm happy to discuss your specific situation... feel free to call me at 404.547.20009.

-John

Sunday, December 1, 2013

Subleasing: Things to consider as a subtenant

Looking to lease space? In today's economy, sublease space will certainly be an option. The question is, "Is sublease space right for me?" To equip you to answer this question for yourself, I'll address a few of the major points here.

In general, subleasing is something you will want to consider because of the monetary benefits.
  • You WILL pay below-market rent.
  • In many cases the space will come fully furnished and wired for communications.
  • Some spaces even come with phone, surveillance, access control, and/or audio/visual systems.
  • There's a strong likelihood that you can take ownership of this personal property at the conclusion of the sublease.
Before we get into the factors to watch, why do I believe that sublease space will be an option? Because there's a lot of it.  Consider the statistics from the end of November of 2013, taken from CoStar:
  • Over 3.48 million square feet of sublease office space was available in metro Atlanta, comprised of 519 spaces distributed among 354 properties and ranging in size from 64 SF to almost 79KSF.
  • Around 25% of the available office space in metro Atlanta is being offered for sublease.
So back to our question: "Should I consider it?" Generally speaking, the answer is yes, it makes good business sense for the reasons stated above.

BUT there are many factors to consider that would not cross the radar in a direct lease.  Here are a few:

The remaining term. This is a critical point. Because moves are expensive and a key benefit is the rent savings, you must realize these savings long enough to see a true win. Saving $100,000 per year in rent isn't worth it if you'll spend $75,000 to move and the master lease expires in 1 year. It seems rudimentary, but this key question is occasionally overlooked.

The sublessor. Are they solid? You're going to be sending them a big check every month, so you need them to be reliable. Believe it or not, I know of a law firm who was taken advantage of by a sublandord who accepted their security deposit and first month's rent and then disappeared just after the law firm took occupancy. Consider the following:
  • Are they likely to survive the remaining lease term?
  • Can you trust them to pay their rent to the landlord?
  • If required, will/can they intermediate between you and the landlord?
The space. If the space requires modification for your use, there are a litany of issues to consider:
  • Will the landlord approve your modifications?
  • If you're not taking over the whole space, how will communications wiring be handled?
  • Who will pay for the modifications?
  • Will the space have to be returned to its original condition?
  • Will the subtenant incur liability for and modifications the sublandlord made prior to the sublease?
The landlord. Your sublease contract will be with the sublessor, but your day to day operational interactions will be with the landlord. Will they work amicably with you?

The master lease. You MUST review the master lease, because it take precedence over your sublease. Are its terms and conditions acceptable?

Other Details. There are many other factors you'll want to keep in mind as you review a particular space. A few include:
  • Parking. Who will pay for any parking spaces? Will you get control of any reserved spaces? What if you don't need all of the spaces called for in the lease? What if you need more?
  • Expiration. What will your options be at the expiration of the sublease term? Are you willing to pay market rent for the property, or will you have to move at lease expiration?
  • Signage. Can you be listed on the marquis?
  • Conflicting tenants. If you're not in the same business as your sublandlord (you probably won't be), are there any prohibitions or exclusions that will lock you out of the space?
As a closing thought, I strongly urge you to use professional representation. Subleasing will require coordination among three parties and the interlaced, overlapping issues can carry serious consequences. Your representation should come at no cost to you, as the sublandlord will have already built your representative's fees into their cost structure.  If you don't know a reliable agent, give me a call... I'll give you a fair assessment of whether you need help and how to best find it.

John
404.547.2009