Healthcare Real Estate Continues Strong Performance – How the Silver Tsunami continues to supercharge Healthcare real-estate

Colliers research and forecast report is excellent overview and clearly shows the dynamic growth ahead for Houston.

United States Research Report

2016 HealtHcare Marketplace

Healthcare Real Estate Continues
Strong Performance
Michael Roessle Director of Office Research | USA
Colliers’ analysis of the healthcare industry and its effect on
commercial real estate in the U.S. points to a soaring healthcare
landscape with expected increases in investment and further
“retailization.” In 2016 and beyond, there will continue to be strong
demand for medical office space as healthcare spending rises and
demand from an aging population grows.
Investor appetite is driven by higher yields compared to other asset
classes, low interest rates and a stable tenant base with strong
credit. The solid fundamentals of this asset class, combined with
the projected aging population growth, are attracting investors not
accustomed to investing in medical office buildings. Strong demand
should continue into 2016, with the recent interest rate rise having
minimal effect.
The retail sector is also expected to benefit as medical clinics,
urgent care centers and other outpatient facilities lease space in
shopping centers where retailers have left vacancies. There are
often favorable lease terms in centers with several vacancies and
these areas offer greater visibility and more convenient locations to
their patients.
We expect healthcare costs will continue to rise as the Affordable
Care Act (ACA) has enrolled millions of Americans who are actively
using the coverage they are now paying for. This, combined with
the projections in growth of the population 65 years and older,
leads to the estimate of a near doubling of healthcare spending –
from $3 trillion in 2014 to $5.5 in 2024.
As hospitals and healthcare systems are under pressure to reduce
costs while increasing the quality of care, there has been a wave
of merger and acquisition activity that is expected to continue
into 2016. These hospitals and healthcare systems are seeking to
improve efficiencies, reduce duplicate facilities and gain greater
negotiating leverage with insurance companies.

read the full report…. here.