Physicians Realty Trust Capitalizing on Shift to Outpatient Real Estate

John Thomas, president and CEO of Physicians Realty Trust (NYSE: DOC), joined REIT.com for a CEO Spotlight video interview at NAREIT’s 2015 Washington Leadership Forum.

Physicians Realty Trust is a pure-play health care REIT focused on medical office buildings. According to Thomas, the trend of moving health care services from hospitals to outpatient offices is having a dramatic influence on the sector. Thomas noted that most hospitals in the United States are now “out of date and worn out” after 50 to 70 years in use. Consequently, health care providers are moving into more efficient settings as they transition to medical offices, he said.

Medical tenants are looking for “inviting” facilities to treat their patients, according to Thomas. That means smaller office spaces and larger, “patient-friendly” areas for treatment, he said.

“It’s a setting where you no longer have the big corner offices for physicians,” Thomas observed. “It’s more about the treatment and care space.”

In terms of growth strategies, Thomas noted that more outpatient care facilities are coming to the market. Physicians Realty Trust doesn’t engage in development directly; however, it does work closely with development companies, he said.

“We work with a lot of developers who are starting new projects,” Thomas said. “In a year from now, two years from now, there will be a lot of new property for us to acquire and help fuel our growth.”