The Prognosis for Medical Development in Lee County

By Gary Tasman

When the U.S. Census Bureau released its new population estimates for cities and towns this May, the numbers weren’t surprising to Southwest Floridians. Lee County was one of the top-ten fastest growing counties in the nation, with an estimated net increase of more than 23,000 new residents in 2021. More than 8,200 of those new residents moved to Cape Coral and nearly 5,900 more migrated to Fort Myers, placing both near the top of the list of the nation’s fastest-growing cities.

With that population explosion comes the need for more services to meet the growing needs of our new residents, in particular medical services. Keeping up with our historically fast-growing community’s needs has always been a priority—and a challenge—for Lee Health.

Keeping Medical Services Accessible

With our most recent population surge, ensuring that medical services are accessible to the community is more important than ever. Recognizing this, Lee Health has $800 million of new capital projects in the works to expand access to hospitals, physicians and specialist services. Other medical providers have taken note of our growth and are also making moves into this market.

In the last five years, Lee Health has built a standalone facility for Golisano Children’s Hospital and also expanded Gulf Coast Medical Center by three stories, adding 216 patient rooms, and they’re building a new tower to house intensive care units, dialysis suites and more. Those projects, totaling more than $480 million, have allowed the hospital system to keep pace with our region’s growth, but more is still needed.

In 2020 (the most recent year that the Florida Department of Health has published data), Lee County had 281 hospital beds for each 10,000 county residents, placing the county in the top third for access in the state. That number is comparable to Palm Beach County and stronger than other West coast counties such as Collier, Pasco and Manatee. The fact that hospital bed availability has remained competitive is impressive, considering that Lee County’s population growth has risen significantly faster than any of those counties over the past 20 years.

Upcoming Lee Health Projects

Over the next half-decade, Lee Health’s aggressive plans to keep healthcare accessible include the Lee Health Colonial Campus on Challenger Boulevard between Colonial and Winkler. The $465 million hospital would include 168 acute care beds, 30 emergency rooms, 16 operating rooms and a medical office building. And with 52 total acres available to develop, the site promises plenty of room for growth in the future.

The hospital system has acquired an additional 57 acres on Pine Island Road in Cape Coral, one of Southwest Florida’s fastest-growing corridors. “Cape Coral has a population of 200,000 and growing,” said Chief Financial and Business Services Officer at Lee Health System,  Ben Spence. “Where it’s moving is Northwest, outwards from Pine Island and North. The beauty of Pine Island Road right now is that there are so many developments going in, there’s going to be incredible synergies.”

Although Lee Health is still determining the best use for the upcoming Cape Coral facility, Spence tells us it will likely focus more on ambulatory care. Options include a free standing emergency room and surgery center as well as specialty services focused around high-need areas such as cardiology, orthopedics or oncology.

Health Care Competitors Turn to Lee County

Lee Health is not the only hospital system with its sights set on expansion in Lee County. In 2019, Florida removed major portions of the state’s Certificate of Need requirement, opening the state to more competition in health care services like hospitals, and rehabilitation centers.

The largest competitor to take advantage of this more competitive environment is HCA Healthcare, which targeted Cape Coral for a new freestanding emergency center on Pine Island Road. Within the next few years, HCA plans to build a hospital with 100-plus beds just a stone’s throw away from Lee Health’s new site on Challenger Boulevard. HCA, a for-profit health system, is the largest in the state of Florida.

ShorePoint Health (formerly Bayfront Health) has also ventured into the Cape Coral market, opening a full-service emergency room and urgent care center in Northeast Cape.

Competition leads to Innovation

As these new competitors enter the market, Lee Health has made strategic moves to both prepare for and engage with potential competition. An example of this can be found with Lee Health’s strategic alliance with the Cleveland Clinic, with whom the system has established a clinical affiliation on its cardiovascular program.

“We have opportunities to improve and learn from other systems that are at the top of their class,” Spence said. “Cleveland Clinic is number one in the whole nation on cardiovascular. We want to align with those types of partners.”

Another partner new to Lee Health is Alabama-based Encompass Health. The two jointly own and operate the Encompass Health Rehabilitation Hospital of Cape Coral and plan to partner on a similar project adjacent to Gulf Coast Medical Center.

Southwest Florida’s needs for health care are constantly evolving as our population grows and our community’s demographics shift. “We know that you need access to health care. It needs to be timely, it needs to be a great experience, the outcomes have to be of the best,” Spence said. “We know there’ll be new entrants and we want to be that provider of choice.”

What does this Mean for Commercial Land Owners?

With the need for more medical facilities higher than ever, investors with property zoned for commercial professional use are in an ideal position to develop or sell. Our first quarter medical office MarketBeats report notes that economic conditions, combined with six quarters of positive net absorption, have translated into record-breaking vacancies in our medical office market.

To hear more from Ben Spence about Lee Health’s growth plans for Southwest Florida, tune in to episode seven of our podcast, What’s Developing in Southwest Florida.

Are you ready to take advantage of this unprecedented surge in need for medical office property? Contact the Commercial Property Experts at Cushman & Wakefield Commercial Property Southwest Florida at 239-489-3600 or by contact-us.

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