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Posted: Monday, January 26, 2015

Top 5 Predictions for Medical Office Real Estate in 2015

The “retailization” of healthcare will continue to increase this year, according to executives at Revista, an Annapolis, Md.-based research firm that focuses on the medical real estate industry. Revista was founded in 2013 by seniors housing industry veterans Elisa Infante Freeman, Mike Hargrave and Hilda Flower Martin. The company tracks investment sales and construction statistics in the medical office sector, as well as publishing the Top 50 Owners report for the industry. Here are Revista’s predictions for the year ahead:

1.Transaction levels will remain near record highs due to strong valuations and capital availability.

2.Development will continue to increase as industry focus remains on outpatient services.

3.The "retailization of healthcare" trend will continue, with patients being viewed as customers and healthcare providers focusing on providing services to those customers in convenient locations.

4.As short-term interest rates will begin to rise, the change will likely cause a corresponding increase in the cost of capital, as well as in the medical real estate buyer landscape.

5.Consolidation among healthcare providers will continue as systems acquire hospitals and hospitals, in turn, acquire medical practices to improve efficiency and combat increasing cost pressure.

Source: National Real Estate Investor, Susan Piperato


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