Skanska Nabs $73M Hospital Expansion Contract

The project calls for Skanska to build a three-story healthcare facility encompassing approximately 72,000 square feet. Construction of the building, which will meet LEED certification standards, will commence this summer and wrap up by the close of 2012.

June 10, 2010
By Barbra Murray, Contributing Editor

Skanska USA Inc. continues to grab its share of the flurry of hospital construction assignments that are popping up, with its recent obtainment of a $73 million contract to oversee construction management for the expansion of Queen of the Valley Medical Center in Napa, Calif.

The project calls for Skanska to build a three-story healthcare facility encompassing approximately 72,000 square feet. Construction of the building, which will meet LEED certification standards, will commence this summer and wrap up by the close of 2012.

The construction industry has been ravaged by the country’s financial crisis across the board, but activity in the hospital sector, while it has definitely felt the burn of the credit crunch and the economic downturn, has been more prevalent than in many other sectors. In May, ground broke on the $754 million Wishard Hospital replacement project in Indianapolis, in March, Hunt Construction Group won the contract for the $240 million redevelopment of Sequoia Hospital in Redwood City, Calif., and earlier this year, Parkland Memorial Hospital in Dallas signed off on the initial site plan for a $1.2 billion replacement hospital.

New York City-based Skanska has had its hands in many of the hospital construction projects that have either commenced or been awarded this year. During the second quarter alone, Skanska won the contract to build the $47.6 million Smyth County Community Hospital in Marion, Va., and in May, the company secured the $42 million construction management assignment for the expansion of a Houston hospital for the Harris County Hospital District.

The ongoing challenge of accessing funding notwithstanding, hospital construction projects are still moving forward, spurred by the need to accommodate growing demand from the aging baby boomer population and the increasing number of U.S. residents. And there is another factor that is expected to bolster development in the hospital sector. According to a recent report by Marcus & Millichap Real Estate Investment Services, “The passage of healthcare legislation will translate into increased demand for medical office space, stimulating absorption in existing properties and fueling medical office and hospital construction over the extended outlook.”