Healthcare Real Estate Continues to Perform at a High Level

Healthcare real estate continues to perform at a high level, with occupancy expansion and rental rates continuing a solid year-long upward trend. With an abundance of new challenges, however, healthcare providers are rethinking and strategizing their real estate needs and opportunities.

Many healthcare tenants prefer to purchase existing retail space rather than build new office buildings or freestanding medical facilities. This typically allows them to take advantage of the foot traffic and visibility of being located in a shopping plaza or large mall. Additionally, it allows for synergy with other tenant in the same space which can help attract additional patients.

With technology innovations such as telemedicine, patients have an option to receive treatment without having to leave their homes. Yet, certain services such as MRIs, X-rays and Ultrasounds still require in-person visits to hospitals and medical offices. Therefore, hospitals and healthcare operators must find ways to offer these services in more accessible locations while minimizing the cost of these expensive tests.

The aging baby boomer population is forecasted to increase demand for senior housing and skilled nursing facilities. This should drive growth for REITs focused on these types of properties.

As the healthcare sector continues to evolve, hospital and health system leaders must bring the same level of strategic focus and analytical rigor to their real estate portfolios as they do to other business lines. Whether it’s acquisitions, dispositions or development, HBRE’s team of commercial advisors with deep expertise in this sector are well-positioned to guide clients through a variety of opportunities. healthcare real estate

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