In this summary both the disadvantages/advantages of building, buying, and leasing the space for the addition of the orthopedic line at the hospital will be discussed. Several different aspects have to be considered in making a decision like this. Some aspects include the current healthcare market, real estate trends, financial costs, etc.
A1a. Building Advantages:
Building allows the hospital to design and customize the building for the orthopedic line specifically to their needs
Building cost are cheaper than buying the building that is currently adjacent to the hospital. Total estimated cost to build based upon $120 per square foot x 5000= $600,000. The building/ lot cost is $700,000
If there is any additional space in the building not being utilized this could be leased to generate additional revenue for Trinity Community Hospital
Space could increase in value over time, and overall generate more equity for the hospital.
As of 2009, “nearly half of hospitals had put capital projects on hold and many had stopped projects already in progress” (Hrickiewicz, 2009)
A1b. Buying Advantages
Place adjacent to the hospital is already centrally located, and convenient for hospitals, patients, etc.
Space could increase in value over time, and overall generate more equity for the hospital.
Startup could begin sooner due to not having to wait for the building to be constructed
Modifications could be made to the building due to the fact of having ownership
Unused space in the building could be leased to other healthcare providers
A1c. Leasing Advantages
Leasing the building is 20.00 per square foot.
The leasing price allows for less money due up front. These additional funds can be used to get the orthopedic line up and running. More money allows for more equipment and necessary items to make the service line off to a great start.
No big investments risks established
Currently real estate market for commercial properties is a little uncertain, so...