Healthcare Real Estate Utilization: More Than Vacancy Data

Healthcare systems spend a great deal of time and effort toward improving patient access, operating margins, physician productivity and capital allocation.

But real estate portfolio performance is most often analyzed through occupancy, which isn’t enough.

In its recent report, “Beyond Vacancy: A Maturity Model for Measuring Healthcare Space Utilization,” Newmark suggested that healthcare organizations should dig deeper into measuring real estate performance.

Facilities, strategy and real estate teams together “possess the information needed to transform real estate from an operational necessity into a strategic asset,” the report said. The problem is that these groups aren’t integrated, which means decision-making information tends to be disconnected and ineffective.

Newmark proposed a five-level maturity model to provide a framework for integrating perspectives.

• Level 1: Occupancy status. The first step is to determine whether the clinical space is occupied or empty. Combining the information with square footage and occupancy costs can help identify properties that consume resources without actively supporting patient care. Data source: facilities.

• Level 2: Square feet per exam room. Comparing facilities against internal design standards or relevant benchmarks helps measure physical design efficiency. A careful analysis can uncover inefficient layouts, oversized support areas and excess circulation space. Data source: facilities and design standards

• Level 3: Static provider occupancy. Adding provider assignments to the mix provides a clearer picture of operational capacity, assuming the healthcare staff uses the space full-time. A clinic that is assigned six providers differs from one assigned two providers, even if both have the same amount of space. Data source: provider assignments.

• Level 4: Dynamic provider occupancy. Data should come from mobile clinicians, those who divide their time between clinics, hospitals, stand-alone surgery centers, telehealth and administrative tasks. The analysis offers a more realistic assessment of when clinical space is actually in use. Data source: provider scheduling.

• Level 5: Clinical productivity per square foot. This approach combines real estate data with clinical, operational and financial performance, providing an analysis as to which location delivers appropriate patient care relative to its costs and resources. Data source: clinical, operational and financial data.

The report noted that healthcare real estate decisions require longer timelines than other healthcare system functions.

Newmark emphasizes that the objective is not simply to maximize activity per square foot, but to understand how effectively real estate supports care delivery. Lease renewals require commitments before operational needs are fully understood. Capital replacement and allocation cycles can outlast executive tenures. Development projects require years to deliver.

“Because these decisions are difficult and costly to reverse, healthcare organizations need a clearer view of how space supports care delivery before committing capital, renewing leases or expanding the portfolio,” Newmark said. “A mature utilization framework helps leaders anticipate needs rather than react to visible inefficiencies.”

Photo: AI Generated