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.


Wednesday, September 18, 2013

When to Start the Lease Renewal Process?

“We should be fine if we start 3-6 months before expiration.”  It sounds good on the surface, but it’s a very costly mindset.  And it’s a deceptive mindset because many tenants never realize the harm that has been done.  Their landlords certainly won’t tell them!

What’s wrong with a 3-6 month timeframe? 
The process seems simple from the outside, so 3-6 months sounds just about right.  The landlord sends a lease amendment… if the tenant likes it they sign it and are all set for their new term.  If the tenant doesn’t like it, they threaten to leave.  The landlord gets worried, improves the offer, and THEN the tenant signs and is all set.  It seems like 3 months should be plenty of time, and 6 months is generous.

The problem with a 3-6 month window is that it tells a knowledgeable landlord (in no uncertain terms) that they don’t have to present their best pricing or terms.

What do we gain from a strategic approach?
A strategic approach to a lease renewal can favorably impact an organization's profit margins AND operational flexibility for years to come.
  • Profit Margins.  With rent being one of the largest expense categories for most companies, this is not where one wants an “off the shelf” answer.  A properly-approached landlord will put their best pricing on the table in all regards (base rate, additional rent, escalations, tenant improvement monies, and much more).  Since leases stretch for years and escalations compound, there’s a long-term value to every dollar saved at renewal.
  • Operational Flexibility.  Growth strategies, service offerings, competitive factors and more are subject to the terms of one’s lease.  There are many flexibility clauses that a landlord will never introduce in a direct renewal scenario that they will accept in a competitive renewal scenario.
How much time is required to execute a strategic renewal?
Looking at the total number of hours involved, the time required to execute a strategic approach is not significantly more than one would spend when asking the landlord for a renewal proposal.  The tricks are (1) this time will be spread out over a much longer period, and (2) it's critical to use a tenant representative.  The tenant representative will manage the entire process and landlord perception, requiring only that the decision-makers review the summary information and make the critical decisions.  The representative, by the way, will be paid by the landlord.

What is the optimal timeframe?
It is best to begin a lease renewal process at least a year before lease expiration – even if one has no intent of relocating.  The reason for this timing is landlord perception.  To get the best renewal offer from a landlord, the landlord must perceive that they are at risk of losing their tenant.  Creating this perception requires that the process begin early enough that there COULD be competing alternatives.
I sometimes begin renewal two years before expiration.  Many organizations have been pleasantly surprised to see a rent reduction before the expiration of the current lease term.

Why does it take a year to relocate?
The relocation process invariably takes longer than expected, largely because there are more – and longer – steps in the process than most people anticipate.  Consider the major components listed below.  With the exception of the first step, each of those steps often takes weeks to complete.
  1. Determining what/where is needed
  2. Reviewing the market to identify all options
  3. Property tours and economic evaluations
  4. Letter of Intent negotiation(s)
  5. Contract negotiation
  6. Space design and construction/modification
Again – the point is not that you WILL go through these steps, but rather the landlord’s awareness that you CAN go through them if required.

How does it all begin?
To determine the best timing for your specific situation, you’ll want to speak with a commercial real estate agent who specializes in commercial (only) leasing.  The right individual will know the owners in one’s area of interest, will know what to ask for in a lease, and will have the know-how to perform long term financial analysis.

My team and I would love to be that resource.  To discuss the specifics of your situation, call me at 404.547.2009.

Friday, July 12, 2013

Cleanroom Space in Atlanta

Cleanroom and Laboratory space is very specialized and not very common.  This article overviews a few cleanroom particulars and ID's several spaces that are currently available in Metro Atlanta. 
What is a Cleanroom?
A good, succinct definition comes from Cadco Systems: "A cleanroom is a static-controlled, dust-free environment where engineers wear special suits, masks and gloves to avoid contamination by airborne particles, chemical vapors and more. They are typically used in manufacturing and scientific research."   
A Cleanroom Building's Roof

The biggest factor making a cleanroom a cleanroom is its specialized HEPA air cleaner systems. These rooms are actually classified according to how clean they are. A Class 10,000 cleanroom's air filters allow no more than 10,000 particles of size 0.5 ┬Ám or larger per cubic foot of air. Class 1,000 and Class 100 cleanrooms follow the same convention and their HEPA filters are that much more rigorous. The buildings to the right both contain a number of cleanroom spaces, and you’ll quickly notice the extensive air handling systems on their roofs,  For a normal roof, note the building to the left of the cleanroom building in the 2nd image.
Cleanroom Roof versus Non-Cleanroom Roof

Cleanrooms are typically installed in single story light industrial buildings. Such buildings have the higher ceilings needed to support the required above-ceiling air handling systems, and their rent rates are lower than that of a pure office building. These buildings can often accommodate modular cleanroom systems as well, where an office building will lack the clearance and/or exposure needed to set modular rooms up.

Cleanrooms are positively pressurized when trying to keep “bad things” out, such as when manufacturing or testing non-hazardous biomaterials. Negative pressure is used to keep bad things in, such as in a disease research facility.

Available Cleanroom spaces
Below is a sampling of what I've seen on the market recently... you'll note that it's a short list.  For the record, this is not every cleanroom space (or space that used to be a cleanroom) on the market, these are just good samples with confirmed infrastructure and availability. 
  • A 100,000 SF building northeast of Atlanta with 22KSF available for lease.  And its rent rate is VERY reasonable.  The building has Class 10,000 and Class 100 spaces (I'm not sure which are available) and has dual/redundant systems.
  • A 22,000 SF building northwest of Atlanta with a large cleanroom component. This building was originally owned and outfitted by a contract research organization specializing in the safety evaluation of medical devices. It’s since been owned and occupied by a company specializing in the custom syntheses of organic compounds.
  • A 13,000 SF building northwest of Atlanta with multiple Class 100 cleanrooms. 3,000 to 6,700 SF is available.
If you are looking for such space and don't see what you need above, don’t worry. There are former cleanrooms and a number of built-out lab spaces of other types that could likely give you a head start. I'm happy to help you review them on a case by case basis.

Here's to your success!

One general disclaimer: All square footages are approximate, and on some of these spaces I’m relying upon the listing agent’s information.

Monday, June 17, 2013

Digitainment what?

The grouping of technologies and technology companies can run in a myriad of directions.  "Verticals" as they're so often called, are people's efforts to lump companies together based upon industry focus in hopes that efficiencies and/or value will be gained through overlapping skill sets and interests.  One of the verticals that caught me off guard when I first heard of it is digital entertainment, also called digitainment by some.

Take a moment and consider the question for yourself... What might digitainment include?  My first thought was movies. And I was right (sort of). But there's more.

Digital entertainment includes five categories of seemingly unrelated business types. They're all highly digitized and they all entertain us, but there are a lot more inter-relationships than you might realize. They frequently interact, sharing ideas with each other, providing content to one another, etc. They're concerned with many of the same issues (tax credits, IP protection, technology evolution, etc).  And the first four categories would never get to us if it weren't for category number 5.

There are also a couple of challenges in the sector.  One issue exists in all organizations, but seems more present in digital entertainment: the business people, product creators, and technology people have a common goal but very different focal areas.  For some reason, these areas seem to intermingle more at digital entertainment companies than in other sectors.  The second issue is that there are MANY small companies in the sectors and discovering them all is very difficult.   Just when you think you've uncovered all of the companies in a category, someone shows up that you had no idea existed.

Here are the five areas that comprise digitainment:

  1. Interactive. Most people would call this category gaming, but they'd fall short. It includes games you play online, games you play on your home system (think Wii or Xbox), games you play on your mobile phone, and other venues I'm sure I'm missing. You might be playing against the computer, against a person sitting next to you, or a person around the globe. It ALSO includes things like training simulators that the military and pilots use. Organizations like the Georgia Gaming Developer's Association oversee this realm, and it's big business. The best overview I've see on this sector comes from Scott Burkett's article identifying the factors making Georgia a great place for the gaming industry.

  2. Broadcast. You and I would typically call this television. It has to do with the production of content for the world to watch. Turner Broadcasting is Atlanta's 900-pound gorilla in this space, but there are hundreds of other companies involved in some form or fashion in this space.

  3. Film. This is movies. Tyler Perry's studio in Atlanta is an example.  And his studio has been joined by many others in recent years.

  4. Music. You'd think this one is related to the music we listen to as we're going about our day, but there's a whole other side to consider. What about the music we listen to when we're watching movies or television? Or when we're playing those games? Somebody's gotta' produce that also.

  5. Distribution. Finally, the support structure for it all. All of these bits and bytes have to move from place to place to while they're being produced, and then they have to be delivered to us, the end user. You may not be aware, but television and film content frequently moves all over the country getting ready to be put in front of us. And think about those online games... they have to originate in a server that's in a REALLY reliable environment. And you wouldn't believe all of the various protocols and encryption methods used along the way. Distribution includes hardware devices, data transport services, data centers, optical media, and so much more.
So that's Digitainment.

The final question one may ask is, "Why would a technology-centric real estate guy like you write about a sector like this? I thought you guys just got paid to complete transactions." You're right about how I get paid, but there's more to it.  After spending 16 years in the technology space before entering real estate, I'm still a nerd at heart and I love seeing what these companies are able to do with technology.  The marriage of creativity and technical know-how makes for a truly fun work environment... one it's very easy to be passionate about!

Tuesday, April 23, 2013

Can EHR Help Avoid Healthcare Payer Fraud?

Data analytics is a powerful tool.  When I worked in technical operations for a consumer-based technology service provider, we relied very heavily on DA to identify, diagnose and very quickly fix problem areas. In short, DA is the process of analyzing large sets of data, identifying unique characteristics of particular behaviors, and then revisiting the entire data set to find other entries that have those same characteristics.

Based on an article I just read, our government is [wisely] going to apply DA to healthcare claims in order to detect fraud.  The article identifies four ways that investigators are zeroing in on fraud.  As an example of one of the four, imagine that a doctor submits claims for the same lady giving birth twice in a 6-month period.  We can safely presume that this is a false claim... certainly one deserving investigation. To see if this is an isolated incident or a broad issue, regulators can search their entire claims database for similar behavior.  The findings will reveal the magnitude of the fraud as well as identify the biggest offenders.

You can read the article here.

The question that the article prompted me to ask is whether EHR providers will be tracking the payer's "traps" and building some sort of "red flag" mechanism into their product sets to help physicians avoid fraud accusations. I don't yet know the answer.

I'd be interested to hear your thoughts... you're welcome to comment here or email them to me at the email address in my "contact" section.

Friday, March 22, 2013

Video Games are Big Business

I love working with game development companies. They're filled with very bright and creative people with a strong work ethic. Those same people, perhaps because of the nature of their product, create cultures that value collaboration, team-building and "play time". Over the years, it's been a pleasure to help several large developers craft and then execute real estate strategies that balance their demanding needs.

That's why I'm not surprised to learn of a recent report stating that Georgia's video game industry accounted for $1.6B in economic activity and nearly 2,000 high-wage jobs in 2012. That's also why I support the continuation of the tax credits designed to encourage growth in such companies.

Highlights from the report can be found at this link, where I learned of the report.

And for a map identifying many of Georgia's gaming assets, click here and use the buttons at the bottom right of the page to go to page 3.

Here's to your success!