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Similarly, healthcare tenants are also selective in co-tenancy considerations as well; many will consider other undesirable uses nearby, whether that CBD shops, plasma donation centers, a competitor or even a non-affiliated urgent care center. • Medical Waste: Though generally the tenant’s responsibility to contract for waste removal, owners should consider whether the building can accommodate a private, out-of-sight location for medical waste to dropped. The presence of biohazardous waste can unsettle other more traditional office tenants, and owners should develop an awareness of this factor to ensure other occupants’ comfort and to ensure that biowaste does not get into the regular dumpsters. • Building Infrastructure: Critical elements to a building’s candidacy as a potential medical office building include whether the HVAC systems can support venting and air change out requirements and whether it will be cost effective to do so; whether the building can accommodate proper electrical requirements; and whether physicians can enter or exit the building through a back door such that they can avoid the front waiting room. Heavier clinical uses, such as surgery centers, may also require stretcher-sized elevators or larger floor to-ceiling heights given all the equipment used. HIGH-RISE OFFICE AT THE HANCOCK TOWER TURNED PARTIAL-CLINICAL OFFICE 31 : 875 N Michigan Avenue, Chicago, IL The property owner, The Hearn Company, decided to convert four floors to healthcare uses, committing capital to reconfigure many components of the asset to accommodate a

Hancock Tower

surgery center and other clinical uses. Based on Cushman & Wakefield’s Healthcare Advisory Practice input, ownership invested capital to create a dedicated patient entrance with a lobby and two elevator banks (with capacity to add two more), a dedicated healthcare concierge to guide patients, a curb-cut to ease patient drop-off as well as valet parking for patients. The project also features an internal elevator to reach physician suites from the parking garage below the building, which includes a dedicated MOB parking floor, ceiling heights that can accommodate ambulatory surgery center equipment, and back-up generator locations already identified (also a requirement for an ambulatory surgery center). The space, which can now accommodate a full surgery center, is now in lease-up witnessing strong tenant interest. 32 Hearn plans to invest more than $10 million into initially converting floors 28 -20 and 33, totaling 130,000 square feet, into medical office space within the property.

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31 Cushman & Wakefield Healthcare Advisory Practice, Americas. 32 https://magmilemedical.com

42 | OBSOLESCENCE EQUALS OPPORTUNITY