Diagnosing the Healthcare Sector for Commercial Real Estate

May 29, 2014

The landscape of healthcare is changing. A volatile shift from managed care to universal healthcare and Medicare to the Affordable Care Act have affected the healthcare industry with changes trickling into the healthcare sector of real estate investment. While the overall wellness of the healthcare industry has yet to be determined, the prognosis for the healthcare sector of commercial real estate show signs of high growth and low-risk investment opportunities.

Charts Show Opportunity for Medical Building Offices

Hospitals are eager to incorporate medical building offices (MBOs) into their campuses. According to Commercial Property Investor, ownership is shifting hands. Doctors are selling their properties and leasing them back from hospitals. For commercial real estate brokers, this means more sales and more leasing agreements.

Off-campus MBOs in malls or shopping centers are becoming more prevalent as a marketing strategy to be more convenient for patients. Consulting firm Deloitte put out a recent report, forecasting these retail clinics as “an important and growing part of the U.S. primary care delivery system.”

Ownership is Shifting

In the past, healthcare real estate was thought to be more specialized than retail or office spaces, but due to healthy growth opportunities and a more diverse need for healthcare space, new investors are getting involved. Big public REITs used to dominate healthcare. Now, according to Real Capital Analytics Inc.’s recent report detailing share of medical office building buyers, last year public REITs dropped to 19%, down from 43% the year before, while private investors increased their share to 36% from 21% in 2012. Other investors included institutions, equity funds and private REITs.

RX For Healthcare Real Estate

Talk to the Intelica asset management group about getting involved in the fast-growing healthcare sector. Whether it’s on- or off-campus MBOs, new construction or leasing, there is great opportunity for investors at every level.